On Jan. 3, Robert Dutkowsky was named CEO of J.D. Edwards, replacing retiring founder Ed McVaney. Dutkowsky spoke recently with E-Commerce Editor Amy Rogers about his vision for the supply chain management/ERP software vendor.
CRN: Tell me about your most recent job.
Dutkowsky: I am going to take you back one step further than that. I was chairman, CEO and president of a company called GenRad, which is a test and measurement hardware and software company. GenRad was acquired in October by TeraDyne, so when TeraDyne bought the company, I became president of the consolidated businesses. I was executing the end of that merger when J.D. Edwards contacted me.
CRN: And how long were you at IBM?
Dutkowsky: Twenty years, primarily in the field. I was [IBM CEO Lou Gerstner's assistant when he first joined the company. I kind of helped him get his feet on the ground.
CRN: And of course all eyes are on Gerstner this year [as he approaches retirement.
Dutkowsky: Yeah, the question is [exactly how long he's going to stay [with IBM.
Later I went to Asia-Pacific and I ran the midmarket sales and marketing effort and all the channel partners [there. That was an interesting time. It was the late '90s, maybe 1996, and IBM was really trying to grow business in [the region and we really did a lot to cultivate the channel out there at that time.
I [next ran sales and marketing for the RS/6000, which for IBM was very much a channel- and partner-intensive product line.
Then I [left for EMC. I ran sales, marketing, customer service, alliances and partner programs worldwide. EMC is kind of the opposite of IBM in terms of its view of the channel at that time, but I think we did a lot to get EMC to realize that a channel was a viable alternative for delivering its products and services to the marketplace.
I have a long history of [working with the channel and [building partnerships in the industry.
CRN: And yet I spoke to some J.D. Edwards partners about your appointment. They said, 'He's a hardware guy. What does he know about [our business?'
Dutkowsky: When you come from EMC and RS/6000, I guess you get branded as a hardware guy. Interestingly enough, I sold J.D. Edwards software to my IBM customers 20 years ago.
I don't consider myself a hardware or a software guy. I consider myself an applications guy, a solutions guy.
I don't think there's any vendor on the planet, hardware or software and services, that can do everything for all customers. A company like IBM begins to come close to that, but [IBM understands they need partnerships with companies like J.D. Edwards [to complete the solutions.
CRN: I spoke with [J.D. Edwards' COO Hank Bonde about a month ago. One thing we discussed at length was the proper mix of software sales and services. Do you, like Hank, think that 50-50 is the optimum ratio?
Dutkowsky: Anytime your business gets out of balance one way or another,too much software, too much services,you are not necessarily optimally configured to serve your customer.
A balanced approach of 50-50 sounds good. We are a long ways away from that, so we have a lot of work to do to get there.
CRN: If and when the economy improves, is that a factor in re-examining that ratio?
Dutkowsky: I don't think there's a correlation. A booming economy consumes human capital differently than a sluggish economy, but at the end of the day, the [customers need the technology to get the value back.
CRN: You can't ignore that J.D. Edwards' software sales have been sliding down over the past few quarters, while services are picking up. This comes into play as you choose the right ratio.
Dutkowsky: Sure. I think license sales being down is in fact a reflection back into the economy. My perception is that the company has the most well-rounded suite of products that it has had in its history, and if this was 1998 or 1999, then we would probably see much better license sales than what we see today.
I have been here four days, so you have to take everything I say with a grain of salt, but I've looked at the pipeline, and the life of the deals in the pipeline seem to be longer today than they were quarters ago. There is health in that pipeline, but the closing of the deals is just not coming as quickly.
CRN: In the fall CRN covered changes in J.D. Edwards' channel programs. Some of the partners have expressed disappointment in the changes. What is your message to the channel as you take the helm of the company?
Dutkowsky: My message to the channel would be that no company can go it alone, and consequently robust channel partnerships are critical to the success of any business that is going to succeed in the IT world in 2002.
Where companies can go wrong is if they scatter their value out across too many partnerships. Companies like J.D. Edwards don't prosper at the right rates, and our partners don't prosper at the right rates.
To me, what the company did last year was say, we want to pick focused segments where together we can succeed with partners and we want to align our values around those selected segments. When you do that, everybody performs better. But there may be a few [partners that can't play in that focused environment.
Every good company that I've been part of,particularly IBM and EMC from a channel perspective,have historically done the exact same thing. They declare and articulate very clearly to their partners where they want them to focus and where the vendor is going to focus. Consequently, both those companies have robust channel programs.
CRN: Any folks you intend to bring along with you to supplement the J.D. Edwards management team?
Dutkowsky: It's way too early to say that. My task now is to get to know people here at J.D. Edwards and figure out the optimum way to deploy our resources. Now obviously, after 25 years in this industry, I know a lot of people. I know a lot of executives and channel partners, but I want get to know the J.D. Edwards people and then put together the very best team that we can to go establish leadership in this industry.
CRN: You've got a wide range of competitors, from Oracle to the newly public Lawson to Manugistics, which just finished a decent quarter, to SAP, which is forecasting a solid quarter.
Dutkowsky: I have never backed down from any competitor, ever. Those that back down get left behind. I am not afraid of fighting against PeopleSoft or SAP or Oracle.
J.D. Edwards has historically been focused on the midmarket and decided to return to [those roots a year or so ago. I think that is exactly the place for J.D. Edwards to compete.