THINK IT Services

As 2009 comes to an end and a fresh round of snow blankets the Boston area, I’ve found myself reflecting on the past decade with varying emotions.

Here’s a random list of some of the ways the tech industry and our world has changed over the past ten years,

1. We’ve moved from concerns about Y2k to learning how to cope with Gen-Y, or the Millennials.
2. The failed ideas about Application Service Providers (ASPs) have bred a new generation of far more successful Software-as-a-Service (SaaS) vendors.
3. The overly complex and exceedingly costly concept of ‘utility computing’ has given way to the incredibly exciting and far more cost-effective possibilities of ‘cloud computing’.
4. Despite concerns about an over-saturation of ‘dark’ fiber, the proliferation of broadband networks has made the ubiquitous web and social networking possible.
5. Vmail and email have been supplanted by text and Twitter.
6. Netscape has been replaced by Google as the company most feared by Microsoft.
7. Tradeshows have been replaced by telebriefings and telepresence.
8. Starbucks and the spare bedroom are now corporate offices.
9. Secretaries have been replaced by smartphones.
10. The phone company is offering entertainment and the cable company is offering phone services.
11. Full-time employment is now a backlog of projects spread across multiple employers.
12. The Boston Red Sox won the World Series…twice! But, the Yankees also did it twice…to open and close the decade.
13. 911 know brings 9/11 to mind for nearly every American.

I founded THINKstrategies about 75 days after 9/11. The start-up I was previously a part of had decided to fold its tent and times were tough. We were in a period filled with plenty of fear, uncertainty and doubt (FUD).

Despite the demise of the dot.com era and the failures of ASPs, I believed the world was about to change. Technology was too complicated and costly. But, it was also becoming far more powerful and flexible. Innovative companies were already beginning to deploy technology as services.

In 2001, I believed there was an opportunity to help vendors, buyers and investors better understand the business implications of this transition of the technology industry from being product-centric to a services-oriented model. THINKstrategies was founded with this ideal in mind.

I’ve had the privilege and pleasure of working with a wide array of clients over the past eight years, from entrepreneurs still working off a napkin to name-brand corporations trying to reposition themselves in the market. In 2009, I did business with over 100 companies!

As 2010 approaches, we are at another crossroad. The economy is still languishing. Jobs are still being lost. Terrorism is still on everyone’s minds. And, the double-edged qualities of technological advancements are creating exciting new opportunities even as they disrupt many traditional businesses.

I’ll offer my predictions for the new year and decade in my next blogpost. In the meantime, thanks to all for your interest and support.

Let me know what the past ten years have meant to you and what you think the future will bring to our industry.

Since 2009 is coming to a close, I thought it would be a good time to review how I did with my predictions for the year regarding the Software-as-a-Service (SaaS) and cloud computing market.

1. On-Demand Services Move From Why To How

According to a Sandhill.com/McKinsey survey of over 850 enterprise customers at the end of 2008, 74% were already favorably disposed to adopting SaaS platforms. As a result, Gartner estimates the SaaS market will have reached approximately $8 billion at the end of 2009, a 21.9% rise from $6.6 billion in 2008. Looks like folks have moved past “why” SaaS to “how” to get the most out of their SaaS deployments.

2. New Hybrid Models

The idea of hybrid SaaS and cloud computing models has been abhorred by industry purists, but the reality is that nearly every business will rely on a combination of on-premise and on-demand resources. In 2009, the concept of “location independence” became bi-directional. It not only means that businesses can move their software and systems to the cloud, but they can now also deploy SaaS and cloud computing solutions behind their firewalls via appliances or ‘applets’. This will enable them to meet their business requirements and satisfy their psychological biases. More importantly, it will exponentially expand the addressable market for SaaS solutions and cloud computing services.

3. Short-Term Slowdown, Long-Term Growth

This is not an easy one to quantify because many SaaS/cloud computing businesses are privately held or operate within bigger companies. However, the publicly-traded SaaS players saw continued albeit slower growth. As the VCs like to say, “flat is the new up!”

4. VC/PE Retrenchment

The VCs were also very concerned in 2009 about how they spent their “dry powder”. As a result, they invested in fewer start-ups and only “topped off” a handful of existing SaaS/cloud computing portfolio companies who they believe hold the greatest promise of a solid exit. The most notorious casualty of this strategy in 2009 was LucidEra, who pioneered the SaaS business intelligence (BI) market, but was not able to generate enough sales to win a new round of funding.

5. Industry Shake-Out and Consolidation

There were many other examples of company failures and acquisitions to illustrate the consolidation and shake-out of the SaaS and cloud computing industry. For instance, Xactly acquired Centiveand Makana Solutions disappeared in the sales compensation segment of the market. NetSuite also acquired and merged together OpenAir and QuickArrow in the professional services automation (PSA) market. 

6. Acquisitions/Alliances Accelerate

There were also a number of interesting alliances initiated in 2009. One of the most innovative was Intacct’s partnership with the American Institute of Certified Public Accountants (AICPA)and its subsidiary CPA2Biz who named Intacct as its preferred provider of financial applications. This alliance gives Intacct access to a vast network CPAs who can serve as referral agents. It also gave the SaaS and cloud computing movement an important endorsement among one of the most conservative yet influential professions.

7. Focus On The Channel

The AICPA/Intacct alliance was just one of many new channel arrangements in the SaaS and cloud computing market. A number of SaaS vendors also launched or expanded their VAR programs in 2009. The most newsworthy was Salesforce.com’s new VAR program aimed at broadening the company’s reach beyond its direct sales team.

8. The Google Generation Becomes Mainstream

Google intensified its focus on cultivating a new generation of office workers via its free Google Apps for educators and the government. It is also teaming with Verizon to offer Android-powered cellphones to capture a share of the market and compete against the iPhone tidalwave.

9. Software/Business/Information/Managed Services Convergence

The convergence of software, business and information services has been evolving for a while. The best example of how this process is manifesting itself is Thomson-Reuters’ use of Salesforce.com’s Force.com platform to create and deliver a new wealth management service to its customers. ConnectWise has also emerged as a major proponent for SaaS and cloud computing in the managed services arena to make it easier for IT workers to do their jobs.

10. Obama Policies Promote On-Demand Services

President Obama’s CIO, Vivek Kundra, told the Wall Street Journal in March 2009, “I’m all about the cloud computing notion. I look at my lifestyle, and I want access to information wherever I am. I am killing projects that don’t investigate SaaS first.” In September, Kundra followed through on his promise to foster the use of on-demand services in the federal government by launching a new online marketplace of SaaS applications and cloud computing services, www.apps.gov.

Looks like I did pretty well with my predictions. Of course, I wouldn’t be reviewing them if I knew I had done poorly!

With my past success now behind me, I’ll post my predictions for the new year and decade ahead soon. Stay tuned.

One of the primary concerns among IT and business decision-makers regarding cloud computing, including Software-as-a-Service (SaaS), is potential security problems. Yet, most enterprises are facing an uphill battle trying to keep their own operations secure.

The latest illustration of this point is today’s Wall Street Journal story claiming that the FBI is investigating a potential security breach within Citigroup that may have resulted in the theft of millions of dollars by a Russian cyber gang. While Citigroup is denying that its computers were compromised and that there is an investigation underway, the story is a clear reminder that no one is safe from hackers intent on attacking a specific target.

Therefore, cloud computing vendors are no more vulnerable and are not necessarily less secure than enterprises. In fact, if the lack of published stories about security infringements among cloud computing vendors is a good indicator, then these vendors have actually proven to be less susceptible to these attacks. You can bet the business and tech pubs are looking for these stories to demonstrate the risks associated with cloud computing and SaaS. Yet, a tally of stories re: security infractions involving enterprise operations vs. cloud vendors will certainly tilt heavily toward enterprise incidents rather than those in the cloud.

This makes me feel even better about the column I published in Datamation last June encouraging IT and business decision-makers to do their due diligence re: the security measures in place within the cloud or SaaS vendors they’re considering, but not let their security concerns get in the way of seriously considering and capitalizing upon the tremendous business benefits associated with cloud and SaaS alternatives.

THINKstrategies announced today that LiveOps has been named the latest winner of the Best of SaaS Showplace (BoSS) Awards program, which is aimed at promoting the measurable business benefits being delivered by today’s Software-as-a-Service (SaaS) solutions. 

The BoSS Awards program was launched in January 2009 to bring attention to SaaS and cloud computing companies that are producing tangible business benefits for specific user organizations. These benefits include increased sales, lower costs, higher customer satisfaction, faster operations and greater profitability.

LiveOps On-Demand Contact Center Platform applies the benefits of cloud computing to the contact center, enabling enterprises to rapidly deploy a scalable contact center infrastructure on a pay-per-use basis to achieve greater operational and cost efficiencies.

Click here to read about LiveOps’ award-winning on-demand contact center capabilities.

Click here to learn more about the BoSS Award program or to apply for an award.

THINKstrategies announced today that ProfitKeeper has been named the latest winner of the Best of SaaS Showplace (BoSS) Awards.
 
The BoSS Awards program is aimed at bringing attention to SaaS and cloud computing companies that are producing tangible business benefits for specific user organizations. These benefits include increased sales, lower costs, higher customer satisfaction, faster operations and greater profitability.

ProfitKeeper is a leading provider of SaaS-based financial tools for franchisors, affiliate groups, organizations and their members and franchisees. Its web-based, back-office solutions give users a way to simplify accounting activities while providing real-time graphs and reports for tracking and analyzing profitability.

Click here to read about the business benefits which ProfitKeeper has generated for its customers.

Click here to learn more about the BoSS Awards program or to apply for an award.

While others are looking ahead to 2010, I thought it would be a good time to look back at the major events in 2009 which many have an important impact on the future direction of the SaaS and cloud computing industry.

Click here to see which events made my top ten list.

THINKstrategies announced today that Pervasive Software (NASDAQ: PVSW) has been named the latest winner of the Best of SaaS Showplace (BoSS) Awards program, which is aimed at promoting the measurable business benefits being delivered by today’s Software-as-a-Service (SaaS) solutions. 

The BoSS Awards program was initiated in January 2009 by THINKstrategies to bring attention to SaaS and cloud computing companies that are producing tangible business benefits for specific user organizations. These benefits include increased sales, lower costs, higher customer satisfaction, faster operations and greater profitability.

Pervasive Software helps companies optimize their data investments through embeddable data management, agile data integration software and by enabling next-generation analytics. Pervasive’s data integration platform accelerates the sharing of information between multiple data stores, applications, and hosted business systems across a broad range of diverse integration scenarios, including pre-configured hosted integration solutions.

Click here to read more about Pervasive Software’s BoSS Award.

Click here to learn more about the BoSS Award program or to apply for an award.

I had the privilege of serving as the chairman and ‘master-of-ceremonies’ at this week’s CloudFutures conference for ISVs migrating to Software-as-a-Service (SaaS) in San Jose, CA.

The event succeeded in drawing over one-hundred attendees seeking to better understand the complexities associated with leveraging the rapidly growing array of cloud computing services to develop and deliver SaaS solutions.

While this number may not seem significant, it was exactly the scale of event that I expected given the time of year and proliferation of cloud-oriented conferences. It was also an ideal size to delve into many of the thorny issues surrounding SaaS and allow the attendees to freely interact with the speakers, as well as one another.

In many ways the event resembled the SoftLetter SaaS University sessions where I’ve served as a keynote speaker and sponsor. While I’m still a big supporter of those sessions, I was happy to assist the organizers of this conference because they were filling a void in the calendar while SaaS U was on hiatus, with its next session scheduled in Dallas at the end of January.

The CloudFutures agenda featured a diverse group of industry pundits and practicioners regarding SaaS/cloud computing market trends; development and delivery best practices;  packaging and pricing techniques; storage opportunities and security challenges; and compliance and other legal concerns.

In addition to focusing on key ISV/SaaS vendor operational issues, I also recruited Doug Harr, the CIO of Ingres, and Allan Leinwand of Panorama Capital to provide the buyer and investor perspectives respectively.

The result was a packed agenda which gave the attendees a 360 degree view of the good, bad and ugly of using cloud computing resources to develop and deliver SaaS solutions.

The bottomline derived from two days of talks is that today’s cloud computing services are too embryonic and possess too many uncertainties to base an entire SaaS business upon at this time.

However, cloud computing also represents an invaluable resource to develop and test SaaS services and strategies quickly and economically.

The rapid technological evolution of the ‘cloud’ and gradual resolution of many of the business issues surrounding cloud computing will make it a more viable alternative for ongoing operations within the next two years, and a critical component of SaaS success going forward.

THINKstrategies announced today that Ultimate Software has been named the latest winner of the Best of SaaS Showplace (BoSS) Awards program, which is aimed at promoting the measurable business benefits being delivered by today’s Software-as-a-Service (SaaS) solutions.

The BoSS Awards program was announced in January 2009 as the latest initiative by THINKstrategies to bring attention to SaaS and cloud computing companies that are producing tangible business benefits for specific user organizations. These benefits include increased sales, lower costs, higher customer satisfaction, faster operations and greater profitability.

Ultimate Software is a provider of end-to-end strategic human resources, payroll, and talent management solutions. The company’s SaaS-based UltiPro solution helps businesses streamline their human capital management (HCM) operations without relying on internal IT resources, or worrying about hardware procurement, installation, upgrades, and maintenance, while enabling them to better control the most critical HR and payroll functions.

Click here to read about the business benefits generated by Ultimate Software’s customers.

Click here to learn more about the BoSS Awards and to apply for an award.