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Category: Software Infrastructure
November 25th, 2009
SaaS and cloud computing: A look at the due diligence
This is a guest post by TechRepublic’s Scott Lowe, CIO of Westminster College in Fulton, Missouri. Lowe walks us through the software as a service and cloud computing due diligence. For more posts like this see TechRepublic’s IT Leadership blog.
Cloud computing, software as a service, outsourcing… to me, these are all synonymous terms. While “cloud computing” as a concept has gained tremendous traction and mindshare, the fact remains that this sector of computing is nothing more than today’s de jour term for outsourcing and the decisions around and challenges regarding outsourcing should remain front and center all the way through the process.
One of the first questions that comes up almost immediately after problem identification and before solution creation lies in the decision as to whether to build a solution or to acquire a product or outsource the development of a solution. There are a great many factors that go into this decision and here, I will discuss a few important points. Over the past few months, Westminster College has had a number of opportunities to ponder this very question and our answers have been varied depending on circumstances.
November 24th, 2009
TR Dojo: Install Windows 7 from a USB flash drive
Install Windows 7 from a USB flash drive Bill Detwiler shows you how to install Windows 7 from a bootable USB flash drive–created with the free DiskPart utility. Once you’ve watched this TR Dojo video, you can find a link to the original TechRepublic article and print the tip from our TR Dojo Blog.
November 17th, 2009
Salesforce delivers solid quarter; Wall Street wanted more
Salesforce.com reported strong third quarter earnings and raised its sales outlook for the fourth quarter, but investors weren’t impressed given the company merely met Wall Street expectations.
The company reported third quarter net income of $20.69 million, or 16 cents a share, on revenue of $330.5 million, up 20 percent from a year ago. Wall Street was expecting earnings of 16 cents a share on revenue of $324.4 million, according to Thomson Reuters.
Overall, Salesforce had a nice quarter to kick off its Dreamforce conference in San Francisco (statement). The rub: Many analysts were expecting Salesforce.com to beat estimates and raise its earnings outlook.
For instance, Cowen analyst Peter Goldmacher expected Salesforce to beat estimates. In a research note he said:
We continue to believe that Salesforce is well positioned to continue to beat and raise for the next two quarters given last year’s significant investments in sales and marketing, solid execution, low balled numbers and easy comps which persist into next year.
Salesforce did raise the sales outlook for the current quarter, but its earnings projections were in line with expectations. The company projected fourth quarter sales to be $340 million to $342 million. Wall Street was expecting $334.5 million. Fourth quarter earnings were projected to be between 14 cents a share to 15 cents a share. Wall Street estimate: 15 cents a share.
The reaction:
For the year, Salesforce is projecting earnings of 62 cents a share to 63 cents a share on revenue of $1.29 billion. That outlook is better than the guidance given in August, but on par with Wall Street’s outlook.
Salesforce said it expects to grow 15 percent to 16 percent for fiscal 2011.
By the numbers:
- Salesforce had 67,900 net paying customers, up 31 percent from a year ago.
- The company ended the quarter with $1.07 billion in cash.
- Deferred revenue was $545 million, up 16 percent from a year ago.
- The company had 3,814 employees as of Oct. 31.
Despite a solid quarter, some analysts expect some tough sledding ahead for Salesforce. Goldmacher said:
We continue to believe that Salesforce doesn’t have the market dominance or a broad enough product lineup to compete in an intensifying pricing war against Oracle at the high end and Microsoft at the low end. Despite the occasional big deal win against Oracle, we believe enterprise buyers are more interested in a holistic approach to CRM that mandates a broader IT investment. We believe Microsoft’s developer dominance at the low end of the market will help make a bundled Dynamics and Azure offering very appealing on price. While Salesforce has hitched its wagon to the ‘cloud’, we believe that the cloud is about far more than CRM and a proprietary development language. We believe the cloud is all about capacity utilization at scale to drive price performance. While we salute Salesforce’s marketing prowess in creating awareness of the cloud, we don’t believe it will be one of the ultimate winners.
November 17th, 2009
Adobe CTO: Flash in the future
At the NewTeeVee Live conference in San Francisco, Adobe CTO Kevin Lynch talks about how the company’s Flash software is coming to new devices such as game consoles, smartphones, and TVs. Lynch says Adobe is working with chip vendors and TV manufacturers on a variety of different television platforms to bring more interactivity to the living room.
November 17th, 2009
Adobe releases Flash, AIR betas; Gauging the potential of multi-touch on the desktop
Adobe on Tuesday released the beta versions of its AIR 2 and Flash Player 10.1 software and the company includes multi-touch support to “bring innovations and optimizations from mobile devices to the desktop.”
Most of the multi-touch talk around Adobe revolves around future mobile support (statement). However, multi-touch has a role on the desktop too. For instance, HP on Monday announced a software development program for its TouchSmart PCs and digital signage displays. HP launched a developer portal and development kit to create things like touch enabled Netflix and Hulu.
The big question: If companies like Adobe and HP build multi-touch support for the desktop will the applications come?
Thinking out loud you could see a bevy of possibilities. Perhaps apps are built for the desktop so information is pushed to you (the revenge of PointCast anyone?) Or the multi-touch support just means we ultimately do away with the mouse in select Rich Internet Applications (RIA). And then there are a lot of commercial applications.
Adobe’s platform is appealing, but it’s in a race to stay ahead of advances in HTML. Multi-touch support could keep it ahead of the race, but we’ll see how things play out on the desktop.
November 16th, 2009
Citrix adds integrated audio to GoToMeeting
Citrix said Monday that it is adding integrated toll-free audio services to its GoToMeeting Corporate and GoToWebinar services.
In a nutshell, customers that establish meeting via GoToMeeting will be able to choose toll-free, a toll number or Voice over IP audio to go with their meetings. Each user will be able to accept an audio option along with Web conferencing.
Citrix said in a statement that GoToMeeting will have one-click recording, subscription based pricing and scheduling tools.
The audio integration makes a lot of sense and is likely to signal more collaboration tools integrating voice. For instance, I fully expect that Skype will enter the collaboration market to give Cisco’s WebEx and GoToMeeting a run.
GoToMeeting’s voice services are provided by Citrix Online Audio, a unit of Citrix.
November 16th, 2009
ICSA Labs: Security products often fail and are insecure
Almost 80 percent of security products fail when first tested and require two rounds of testing before being certified, according to a report from ICSA Labs.
ICSA, a unit of Verizon Business, looked at 20 years of data about security products to cook up that figure. ICSA tests security products and certifies them. So why do these products flop out of the gate? Simply put, security software doesn’t perform as it should. Core functionality—for instance an anti-virus product failing to prevent infections—accounted for 78 percent of failures. In fact, only 4 percent of products pass the first round of ICSA testing.
Logging was the second biggest reason for initial failures. Incomplete or inaccurate logging of who did what and when accounted for 58 percent of failures. Ninety-seven percent of network firewalls and 80 percent of Web application firewalls have at least one logging problem.
November 11th, 2009
Putting SaaS revenue in perspective
Software as a service enterprise revenue is expected to hit $7.5 billion, up 17.7 percent from 2008, according to a report this week from Gartner. That’s a pittance compared to the current enterprise software giants.
Now $7.5 billion is a decent chunk of change, but here’s the reality:
- $7.5 billion in SaaS revenue is less than the sales garnered by Microsoft’s entertainment and devices division for the year ended June 30 ($7.75 billion).
- $7.5 billion is less than a third of Oracle’s annual revenue of $23.2 billion. And Oracle collected $11.7 billion in fiscal 2009 license updates and product support revenue.
- For the nine months ended Sept. 30, SAP reported total revenue of 7.48 billion euro ($11.2 billion at current exchange rates).
The good news is that Gartner projects SaaS revenue to top $14 billion in 2013. That’s big news right? Well not really.
- Microsoft pulled in $14.7 billion in client revenue for the year ending June 30.
- Microsoft’s business division (Office) had fiscal 2009 revenue of $18.9 billion.
- In 2008, IBM had software revenue of $22.08 billion.
October 29th, 2009
With Chargify, Web 2.0 and SaaS businesses can bill with ease
If you’re a small Web 2.0 business, you shouldn’t have to build an application from scratch to properly bill your customers.
That’s the thinking behind Chargify, a billing and subscription system by TechCrunch50 startup Grasshopper. The company’s API and hosted payment solution makes it easy to integrate the system into an existing website, allowing businesses to charge customers on a recurring basis, manage subscriptions, comply with PCI regulations and intelligence from billing.
I spoke with Grasshopper CTO and co-founder David Hauser about how his solution is different from FreshBooks, Zuora, Vindicia, MoneyBird and other competitors.
I also spoke with lead developer Michael Klett about how the system actually works.
October 28th, 2009
Interactive media is about to hit the gym: Great, just great
Netpulse, a company that aims to transform fitness equipment into an interactive social entertainment experience, landed $3.1 million in venture funding. Oh the promise of a treadmill that allows you to use Twitter.
Excuse me while I sprint away from this idea. Why?
My workout is one of the last places where I don’t have to be social. Do I really want mile 5 tweeted? The tweet could look like this: Larry just tweaked his hamstring. Tweet: Larry’s really struggling. Tweet: He’s hanging over the treadmill again and doesn’t look so good. Who are these people that can get a real workout while engaging with Netpulse’s “interactive entertainment platform?”
Here’s the Netpulse vision from a statement:
October 28th, 2009
SAP: Enterprise software market 'difficult'; Emerging markets weak
SAP’s third quarter was a mixed bag. Earnings were a touch better than expectations, but revenue and the outlook disappointed investors. Meanwhile, SAP said the software market showed “signs of stabilization,” but remained difficult.
The third quarter breaks down like this:
- Revenue for the quarter ending Sept. 30 was 2.51 billion Euro down 9 percent from a year ago. Estimate: 2.57 billion Euro.
- Software and software related services revenue were 1.94 billion Euro, down 3 percent.
- Software revenue was 525 million Euro, down 31 percent from a year ago.
- Net income was 435 million Euro, up 12 percent from a year ago. Earnings of 0.37 Euro a share were two cents better than Thomson Reuters expectations.
- Add it up and you have a quarter that was roughly in line with estimates, but the outlook disappointed. Non-GAAP software and software related revenue will fall 6 percent to 8 percent for 2009.
But what caught my eye was the commentary. SAP CFO Werner Brandt noted in a statement:
October 27th, 2009
Intuit enhances Quickbooks by bringing cloud apps to desktop software
Intuit, a trusted name for some 4 million small business customers who manage their finances using the Quickbooks software, is bringing a bit of the cloud to the desktop. The company, like so many others these days, is unveiling an app store of its own and opening its API to developers who want to free the financial data of Quickbooks 2010 into custom apps.
But instead of just putting it out there for customers, the company is embedding a button link to the apps marketplace into the desktop product. It’s an interesting approach - putting a “cloud” element in desktop software - but execs at Intuit say that their customers are taking baby steps into the cloud and aren’t necessarily interested in a full-swing jump into Web-based software.
The company is quick to point out that it’s not automatically sending anyone’s financial data into the cloud. Nor is this some sort of sign that Intuit is trying to move its customers from client-based software to cloud-based apps. But it does offer those who might be interested in testing the cloud a way to do just that.
In some ways, it struck me that Intuit is offering something competitive to what salesforce is offering with its AppExchange program, which allows developers to build custom apps and upload them to the salesforce app marketplace. That becomes even more obvious when you consider that many Quickbooks users also use it to manage their customer lists and relationships - something that salesforce was built to do.
Developers are creative enough and smart enough to build apps that take advantage of the Intuit’s open API and then integrate them with salesforce. Intuit gets that. But it also thinks it has a unique marketplace for small businesses and that many of them can benefit from it.
During an interview, I also talked to Intuit execs about the potential consumer market around custom apps for programs such as Quicken and TurboTax. After all, Intuit’s software has revolutionized personal finance software and consumers are far more savvy about their own finances, especially after some of the lessons we’ve learned from the economic downturn, than they were a decade or so ago
For now, Intuit is focused on Quickbooks and small businesses - but if the apps take off for that market, it’s not a big reach to explore the same concept for consumers. For anyone who’s trying to re-take control of their personal finances in these tough economic times, a push into the consumer could be welcomed with open arms.
October 22nd, 2009
RightNow Technologies CIO talks datacenters, ERP and Windows 7
While attending Gartner Symposium/ITxpo 2009, I spoke with Laef Olson, CIO of RightNow Technologies, about the company’s IT plans for 2010. Olson discussed RightNow’s plans to consolidate and rework its datacenters, an upcoming ERP implementation, and the company’s migration to Windows 7.
October 21st, 2009
Google's Schmidt makes enterprise app case as consumer, corporate lines blur
In a room full of chief information officers, Google CEO Eric Schmidt made his case for the search giant’s enterprise products adding that the boundary between a corporate user and a consumer “is becoming less and less.”
Speaking at the Gartner IT Symposium 2009 in Orlando in a Q&A with analysts Whit Andrews and Hung LeHong, Schmidt added the consumer and enterprise application market are increasingly merging.
“We don’t distinguish between enterprise and non-enterprise (customers). We assume that boundary is becoming less and less,” said Schmidt, who added that applications will span consumers and businesses. “We’ll keep coming up with ways to span the bridge between the consumer and business.”
Case in point: Google Wave. Schmidt said he doesn’t think of Google Wave “as a consumer app at all.” Wave is a new way to collaborate, said Schmidt and its features are “applicable to the corporation.”
Schmidt encouraged corporate buyers to be skeptical about Google’s offerings and hold the search giant accountable. He told IT buyers to evaluate the products and if there are problems to let Google know. Schmidt said Google was determined to get where enterprises needed it to go.
Schmidt thinks that the enterprise business for Google can be a multi-billion dollar one—actually “humongous”—just behind the display ad business. That’s some heady growth considering that Gartner calculated that for every dollar Google makes, about 3 cents come from enterprise buyers.
Among other topics:
October 21st, 2009
SaaS: Shelfware as a service?
Software as a service is portrayed to be the future of information technology, but it isn’t quite the cure-all it’s cracked up to be. Shelfware and lock-in may not save you a lot of money.
That’s the message from Gartner analyst Rob DeSisto.
Here’s DeSisto’s talk at the Gartner IT Symposium in a nutshell:
October 21st, 2009
CA jumps into eco software market; Plans to launch carbon tracking suite
CA next week will unveil an integrated sustainability suite designed to track carbon emissions, environmental assessments, metering and compliance to policies in one dashboard.
CA calls the suite ecoSoftware and will launch it Oct. 26, according to Christopher Thomas, vice president of energy and sustainability. I ran into Thomas at the Gartner IT Symposium where the carbon monitoring software caught my eye.
There are other efforts designed to track carbon emissions. For instance, Hara and SAP have various applications and others use metering to measure sustainability efforts. CA’s effort links the various tracking efforts in one dashboard. If successful, dashboard like these could put some hard return numbers behind sustainability efforts. Tesco, Europe’s retailing giant, is a customer of CA’s ecoSoftware.
The company aims to launch an ecoMeter line to provide baseline measurements for cooling systems, data centers, buildings and other environmental systems and a governance module to link the metrics with the sustainability plan.
CA created the suite from scratch—a notable change given the company’s history of acquiring product lines.
October 20th, 2009
Looking beyond Windows 7 and Office; Pondering the alternatives
Gartner is telling customers to upgrade to Windows 7 and the latest Office, but adds that it may make sense to at least ponder the alternatives and move toward a more operating system neutral stance.
In a talk at the Gartner IT Symposium in Orlando, Gartner analyst Michael Silver rehashed much of what the research firm revealed last week. See: Gartner: Windows 7 is ‘all but inevitable’
However, Silver seemed to advocate that customers at least ponder a more mixed source environment. For instance, an enterprise can have Microsoft Office but use Google Docs or OpenOffice.org as a supplement to lower overall costs. Ditto for operating systems, but the cost equation is a little more difficult. The big elephant in the room: Will operating systems even matter in the future?
Silver notes that most applications in an enterprise will still need Windows well beyond 2011 so the appeal of the Mac OS and Linux have limited appeal. Virtualization is changing that equation somewhat, but the costs can be higher with alternative operating systems when support if factored in. Silver says that Macs will enter the enterprise through the back door, but it’s unlikely that a company will standardize on the Mac OS.
The other issue is the question of the operating system’s importance. By 2014, 20 percent of users will primarily use a browser-based product as their primary office tool.
Consider:
October 20th, 2009
Art of the software deal can get messy
Software buyers and vendors are increasingly butting heads amid a budget squeeze and increasingly aggressive sales tactics, according to Gartner.
In a series of presentations at the Gartner IT Symposium in Orlando, analysts walked buyers through a few negotiating tactics with the likes of SAP, Microsoft, Oracle, Cisco and a bevy of others. Taken as a whole the presentations provide a good overview of what IT buyers are facing these days.
At a high level, Gartner notes the following:
October 16th, 2009
Oracle's big plan: Double revenue in five years
Oracle capped off its OpenWorld conference with a powwow with analysts where management was described as extremely confident about the company’s prospects.
Although I’m not sure you could ever describe Oracle management as timid—does Larry Ellison allow that?—analyst notes seem to portray executives as exceedingly confident. Judging from the recaps Oracle may be bordering on cocky.
Among the highlights:
Oracle executives said the company tends to more than double revenue over the next five years and grow earnings per share by 20 percent. According to Jeffries analyst Ross MacMillan, Oracle’s new bogey is more than $50 billion sales compared to the $23 billion in annual revenue today. Cowen & Co. analyst Peter Goldmacher notes:
Management commented that it has never been more bullish about its strategy and ability to execute against it and vaguely recommitted to another five year 20% annual earnings growth plan.
How will Oracle get there? More acquisitions of course. And a hardware boost from Sun Microsystems. Oracle did indicate that it would wait 18 months before doing another hardware deal, according to MacMillan.
Systems are a key part of Oracle’s growth plan. CEO Ellison has talked up plans to be like T.J. Watson’s IBM and plans to offer integrated systems to the IT masses. MacMillan said he was convinced. “We thought Oracle made a much more compelling case for the Sun Microsystems acquisition compared to what we had previously heard,” he writes in a research note. “Oracle sees a big opportunity selling hardware/ software system combinations to customers.”
However, profit margins will be hurt by hardware, writes Goldmacher.
Oracle wants its products to be easier to consume. Oracle wants to make its products easier to buy for enterprise customers. Management spent a lot of time talking about CRM on-demand, innovation and providing integrated hardware and software systems to solve needs.
Again, these easier to consume vibe revolves around integrated hardware and software appliances. MacMillan writes that the appliance approach provides a bevy of advantages including:
- Make Oracle’s products easier to consume;
- Provide best in class price/ performance;
- Disrupt competition, particularly IBM;
- And take spend away from lower margin system integration and swap it for higher margin pre-configured systems revenue.
The interesting play here for Oracle is melding its Fusion apps with appliances. J.P. Morgan analyst John DiFucci writes:
Oracle has rewritten PeopleSoft, Seibel, and Oracle’s eBusiness Suite to all run on Oracle Middleware along the same lines that management announced when they first started talking about Fusion Applications. We believe the plan is to provide a fusion application suite with the best of everything Oracle has today, but in an architecture that can be migrated to over time.
But the elephant in the room is maintenance. Goldmacher recaps:
Management was up front and aggressive in its assertion that the maintenance business is very healthy because Oracle customers value the company’s innovation and high quality support offerings. Oracle sees very little reason for anyone to get off maintenance and give up the opportunity to receive product upgrades. Oracle stated that they have not seen any customers transitioning to third party support. This sentiment is not shared by many of the customers we talked to in the course of the user conference.
There are a few nuances here, according to Goldmacher. Customers complained about Oracle’s web-based support, the first line of help, but database customers were more receptive to maintenance due to upgrades and bug fixes. Apps customers question maintenance more and chafe over upgrades. Goldmacher says that the number of Oracle customers leaving maintenance for third party support players like Rimini Street is small, the growth rate of these defections are in the low triple digits.
More on Oracle from OpenWorld:
- Oracle Fusion - a damp squib
- Oracle’s Ellison: Fusion finally coming to fruition
- Oracle’s Fusion Apps finally come out from behind the OpenWorld curtain
- Ellison’s keynote: Linux, Exadata, the Governator and more
- Oracle unveils Exadata 2 [video]
- Oracle OpenWorld 2009 - Social CRM Technology Rears an Actual Head
- Saluting SAP & Oracle Communities
- Dell talks Self-Service IT at Openworld [video]
- Oracle’s integration strategy: Customer trade-offs
- McNealy zings iPhone, laments the PC, claims Sun started open source
- Oracle OpenWorld: Getting down to business
- SAP and Oracle going head to head
- Ellison rips IBM, shows off Sun-Oracle benchmarks, offers $10M prize
- Ellison wants to model new Oracle after T.J. Watson Jr.’s IBM
October 15th, 2009
IBM delivers solid quarter, ups 2009 earnings outlook
IBM delivered a solid third quarter that featured better-than-expected profit and revenue growth. The company also upped its earnings targets for 2009.
IBM on Thursday reported third quarter net income of $3.1 billion, or $2.40 a share, on revenue of $23.6 billion, down 7 percent from a year ago. Wall Street was looking for earnings of $2.38 a share on revenue of $23.4 billion.
The outlook was also solid. IBM is expecting 2009 earnings to be about $9.85 a share, up from a previous projection of $9.70 a share. Wall Street had IBM at $9.78 for the year. On a conference call with analysts, IBM CFO Mark Loughridge said the company gained market share in both hardware and software. In software Websphere gained 3 percent market share on Oracle middleware, said Loughridge. On the hardware side, “we’re taking it (share) from both Sun and HP,” he added.
As usual, IBM’s quarterly picture was really about services and software. For the three months ended Sept. 30, IBM’s global technology services unit had revenue of $9.43 billion, down 4.4 percent from $9.86 billion a year ago. Global business services revenue was $4.34 billion, down 11.5 percent from $4.9 billion a year ago. Loughridge was bullish on IBM’s ability to sign deals in the fourth quarter and said “some early signs were encouraging.”
Loughridge added that corporate demand has stabilized going into 2010 with an improving sales pipeline. Loughridge said that’s a substantial improvement and IBM has multiple opportunities ahead. Analysts, however, sounded like they wanted more from IBM’s outlook.
Here’s a look at how IBM’s services unit fared in the quarter (statement, presentation):
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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