THINK IT Services

I suggested in a previous blog that a new model of a ‘hybrid’ software company is emerging in which Software-as-a-Service (SaaS) and cloud computing vendors are offering downloadable appliances, or ‘applets’, which permit users to utilize their web-based solutions off-line or behind the firewall.

My friends at Salesforce.com and other SaaS zeolots in the industry said I was crazy. But, many SaaS other vendors told me they were already offering an appliance option to their customers.

This week Google endorsed my idea by announcing that it is offering a offline version of its Gmail service.

Some folks expected this functionality in 2007, when Google introduced Gears, its browser plug-in aimed at providing offline access to Web-hosted applications. In fact, Google has been offering an on-premise search appliance for a while.

I believe the Gmail announcement is another example of a growing array of offline enhancements being added to SaaS/cloud computing solutions that will become commonplace in the years to come.

SaaS and cloud computing purists might view this development as a bastardization of the on-demand service ideal. In my view, Google’s new option and other offerings like Microsoft Silverlight or Adobe Air are simply the latest advancements in technology aimed at addressing real customer needs and preferences. In fact, Zoho unveiled its own offline email solution in October.

I think these offline capabilities will make SaaS/cloud computing more convenient for users, and will eliminate one more customer objection to adopting on-demand, web-based services which will help to accelerate the growth of the market.

ActionStep has been named the first international winner of the Best of SaaS Showplace (BoSS) Awards program. 

The BoSS Awards program was announced earlier this month by THINKstrategies to bring attention to SaaS and cloud computing companies which are producing measurable business benefits for specific user organizations. These benefits include increased sales, lower costs, higher customer satisfaction, faster operations, and greater profitability.

ActionStep is a multi-dimensional SaaS vendor based in Auckland, New Zealand. Its end-to-end, Web-based, business system includes Marketing, CRM, Sales, Operations, Accounting, and HR management solutions for multi-divisional, multi-currency businesses.

A case example of the company’s business benefits is Lumberlink, a small timber trading company based in Auckland which buys and sells internationally.

By switching to ActionStep’s SaaS solutions, Lumberlink has been able to reduce its administrative headcount; improve cashflow by shortening the time to complete back-office documents needed for payment; and increase sales volumes through smoother transfer of sales information to Lumberlink’s back-office systems over the Web, helping sales people who usually enter sales orders from remote locations. These improvements have enabled Lumberlink to increase its operating margins approximately 20%.

As a result of these measurable business benefits, THINKstrategies has named ActionStep the first international BoSS Award winner.

A full description of the company’s winning BoSS Award submission can be found at  http://www.saas-showplace.com/awardSummary.php?key=599.

Contact info@thinkstrategies.com if you’d like more information regarding the BoSS Awards.

Xactly’s announcement today that it is acquiring Centive is another indication of the Software-as-a-Service (SaaS) industry shakeout and consolidation I predicted would occur in 2009.

Xactly and Centive have been fierce competitors in the sales performance management (SPM) market with both offering pure SaaS alternatives to traditional on-premise software applications.

While both companies were growing as a result of accelerating customer interest and adoption of SaaS, they also found themselves competing more with each other than the established players. Rather than continue to fight one another, they decided to combine forces to better position themselves and capitalize on growing customer demand.

This decision was especially timely given the challenges of today’s economic climate and intensifying competition.

While both companies offer solid solutions with compelling value-propositions, combining their technical capabilities and eliminating the costs of continued head-to-head competition can strengthen Xactly’s position as ‘legacy’ software players escalate their own SaaS efforts.

You can expect to see more mergers and acquisitions of head-to-head competitors in other segments of the SaaS market as these players recognize that they must combine forces to survive.

CrownPeak was named the first winner of the new Best of SaaS Showplace (BoSS) Awards program today.

The BoSS Awards are the only industry awards aimed at promoting the measurable business benefits being delivered by today’s Software-as-a-Service (SaaS) solutions. Unlike other programs which focus on technical innovation, the BoSS Awards emphasize tangible business benefits.

The BoSS Awards program was launched by THINKstrategies earlier this month to bring attention to SaaS and cloud computing companies which are producing tangible business benefits for specific user organizations. These benefits include increased sales, lower costs, higher customer satisfaction, faster operations, and greater profitability.

CrownPeak is a Content Management System (CMS) provider that offers a SaaS solution which helps customers accelerate their Web publishing and better manage their web content. The School of the Museum of Fine Arts (SMFA) in Boston, MA, chose CrownPeak’s Content Management System (CMS) to gain greater control over its website to improve its publishing speed and content integrity.

Click here to read about the significant business benefits CrownPeak’s SaaS CMS generated for the SMFA.

Click here to learn more about the BoSS Awards and how to register.

Platforms have been proliferating and it is not surprising that there are already signs we may be on the cusp of a shakeout.

Today’s platform players range from start-ups, like Bungee Labs, to Software-as-a-Service (SaaS) and cloud computing movement standard-bearers, Salesforce.com and Google with Force.com and Google App Engine respectively.

This has created a somewhat confusing array of players and platform alternatives which have been divided into various segments.

This week’s announcement about Salesforce.com’s new “Service Cloud” illustrates the way SaaS vendors are leveraging platforms to redefine their business in order to extend their market reach and strengthen their position in the marketplace.

SpringCM is heading down this same path with its new platform which enables independent developers and resellers to build applications or more easily integrate to SpringCM’s electronic content management (ECM) capabilities.

Platforms enable these vendors to convert their internal technologies into development and delivery mechanisms which can be resold to third-parties.

In Salesforce.com’s case, this means reselling the development code which underlies its core customer relationship management (CRM) and salesforce automation (SFA) application, along with the service delivery infrastructure which supports it. It also means that it can recast its business to include web hosting and customer service.

In the case of Amazon, it is repackaging and repositioning its vast data centers and eCommerce capabilities into on-demand development and storage facilities, as well as a distribution mechanism.

Vendors can also use a strong customer base as the basis of a platform strategy. For Facebook and MySpace, their vast user populations provide developers a ready-made channel to market.

Intuit is seeking to leverage its vast user base and powerful brand equity to attract third-party developers to its new Partner Platform, formerly the QuickBase Development Environment.

IBM, Oracle and Progress Software are promoting a combination of database systems and middleware capabilities to position themselves as platform players.

Adobe has also become a key player because of the pivotal role of its development tools and growing assortment of applications. Of course, Microsoft is trying to play catch up by promising its own development platform, Azure.

Here’s a quick list of the essential ingredients which a platform player has to have in place in order to win a meaningful share of the market,

• Easy to use, ’standards’ oriented development code
• Reliable and secure development environment
• Automated and flexible procurement capabilities
• Name recognition and brand equity
• Customer base and channels to market
• Developer/Partner network

Put together, these assets can create a powerful competitive advantage.  However, if a platform player can’t offer a combination of these attributes they have little hope of survival.

An example of the rising risks facing the weaker of the players is the recent rumor on VentureWire that Coghead is in talks to sell itself to an unidentified buyer after failing to secure Series C funding.

Software vendors, enterprise developers and IT/business decision-makers will need to take a closer look at the long-term financial viability and other business assets of their platform suppliers, in addition to their technical capabilities.

This raises questions about the future of the Cogheads of the world. But, it also suggests that relatively new entrants in the platform market, like Intuit and Apple, could become strong players.

How many of us saw Amazon being a leading platform player and major force in the SaaS/cloud computing market 2-3 years ago?

Software-as-a-Service (SaaS) and cloud computing are often referred to as ‘on-demand’ services. Yet, in many cases these web-based solutions must be procured for a minimum timeframe, can take time to deploy, and cannot be terminated immediately when their task is done.

In response to these shortcomings, a new array of ’situational applications’ are emerging. Jonathan Sapir of SilverTree Systems has become an advocate of these situational applications and has created a website which promotes them called, Power in the Cloud.

Jonathan invited me to contribute a guest post to the blog on his site about the business implications of situational applications which you can find here…

I received a message today from Khalid Noor Mohammed, a consultant based in Saudi Arabia, not only complementing me on my commentaries regarding Software-as-a-Service (SaaS), but also sharing two links of his discussion on Saudi TV regarding the concept of SaaS and its business benefits,

• Khalid Noor Mohammed on SaaS (Part 1)
• Khalid Noor Mohammed on SaaS (Part 2)

Khalid’s videos got me thinking about the power of video to simplify complex concepts and make them easier for non-technical people to comprehend. This is especially important with relatively intangible ideas like SaaS, and even more so with ‘cloud computing’.

Here are a couple of other videos which I’ve found which do a terrific job of explaining these ideas,

• http://www.youtube.com/watch?v=kGUPSvswmY0
• http://www.youtube.com/watch?v=QJncFirhjPg

While these videos may seem trivial to many IT professionals ensconsced in SaaS and cloud computing on a daily basis, I believe that videos are increasingly useful marketing tools for business executives and end-users who are unfamiliar with or even perplexed by these technological developments.

For example, as I mentioned in my previous post, the sales team I spoke to this week which is preparing to sell a new array of SaaS services were very confused about the definitions and differences between ASPs, SaaS and cloud computing. While I did my best to clarify each of these concepts, I’m sure they and other salespeople, as well as corporate decision-makers, could benefit from videos which simplify these technology trends.

Of course, there is the added element of distributing these videos via the Web which permits the concepts of SaaS and cloud computing to quickly spread across geographic borders, as Khalid’s videos clearly demonstrate.

Let me know if there are more videos which you recommend re: SaaS, cloud computing, managed services and other on-demand solutions.

I’ve just returned from two days in a chilly Florida where I was participating in a sales kickoff meeting for an independent software vendor (ISV) that is preparing to add a Software-as-a-Service (SaaS) component to its portfolio.

I’ve presented to plenty of sales teams about SaaS, cloud computing and managed services, what made this session unique was that this ISV isn’t planning on rolling out its new SaaS solutions for another 9-10 months.

To the credit of the company’s management team, they know that it will take a long time to fully prepare the sales team to properly sell their new SaaS solutions.

Especially, because they’ve been successfully selling the value of their legacy, on-premise applications against a competitor’s “ASP” solution for the past five years.

While the company was confident that it has employed the latest in Web 2.0 technologies and techniques to leapfrog its competitor functionally, it knows that it still has plenty of work to do operationally and from a sales perspective to be successful.

The company asked me to participate in the meeting to educate the sales team about the market forces which are driving the on-demand services market, explain how SaaS differs from the old ASP model, and coach them about how to talk to IT and business decision-makers about the functional benefits and cost-advantages of SaaS solutions.

In addition to giving a one-hour keynote presentation about the overall marketplace, I participated in three breakout sessions aimed at addressing the sales team’s specific questions and concerns.

I was joined in these sessions by company executives who provided candid insights about their SaaS goals, objectives and even uncertainties. They readily admitted that they are making a ‘big bet’ on SaaS and still have plenty of piece parts to put in place regarding how the new offerings will be packaged, priced and positioned.

Their candor was refreshing and rewarded with an enthusiastic response from the sales team which recognizes that times are changing, and they have an opportunity to offer their customers new game-changing SaaS solutions and greater options to meet their corporate objectives.

The sales team and company management both know that it could be a bumpy ride into the SaaS world, but they are giving themselves plenty of time to make the proper preparations.

While I’m happy to help aspiring SaaS vendors at any stage of their evolution, it is nice to be invited in early rather than be called when a company is trying to recover from a false start.

I had the privilege of moderating a fascinating panel session at the SIIA On-Demand Conference this past November entitled, “Systems Integrators: A Firsthand, Face-to-Face View on the State of SaaS”.

The panel consisted of three experienced professionals in the systems integration (SI) business,

• Chris Barbin, CEO, Appirio
• Cary Fulbright, President, North America Operations, Saaspoint
• Lonnie Wills, Senior Vice President, CIO Practice, Bluewolf

The SIIA recently posted a video of this session on their site. Click here to watch the discussion.

Anyone who follows the Software-as-a-Service (SaaS) market knows that every major SaaS player, starting with Salesforce.com, uses the success of consumer-oriented, on-line services as the model for their business-to-business solutions.

SaaS vendors, executives and ‘experts’ (myself included) point to the way these web-based services created an enjoyable, effective and economical user experience as the centerpiece of their success.

The most prominent example of this approach has been Apple iTunes.

Ironically, Apple has never taken advantage of its prominence and positioned itself as a SaaS or cloud computing player.

It appears that this may be changing. At this past week’s MacWorld, Apple unveiled a new, web-based version of its iWork productivity suite. Just as Microsoft’s Software-Plus-Services strategy is an acknowledgement of the growing interest and adoption of web-based apps, so is Apple’s move down the same path.

Apple is also moving in this direction to build on the momentum it has gained penetrating the corporate environment. At the desktop and laptop levels, Apple capitalized on customer discontentment with Microsoft’s move to Vista to win a greater share of the corporate PC market. The iPhone has also been a big hit among corporate customers.

So, Apple is in a far better position to succeed in its SaaS/cloud computing initiative than Microsoft.

Apple has the online procurement and delivery mechanisms to facilitate the new service, as well as the end-user devices (desktops, MacBooks and iPhones).

It is known for its innovations, and will immediately attract a broadbase of curious and committed fans to test the beta version of the new on-demand service.

Apple can also exploit the growing ‘consumerism’ within the corporate IT environment which has seen end-users bring their personal systems and services into the workplace to get their jobs done.

Finally, Apple can also leverage a vast assortment of developers, channel partners and strategic relationships to distribute and enhance its SaaS solutions.

So, the ‘poster child’ for the SaaS movement appears to be making its move to claim a share of the rapidly growing SaaS/cloud computing market.