Category: CRM
November 24th, 2009
EuroCloud UK and a lesson in SaaS marketing
In the midst of a busy schedule the past couple of weeks I’ve been preparing for the launch meeting in London of EuroCloud UK, the British instance of the Europe-wide SaaS and cloud industry community network that was first unveiled last month. Any readers from UK SaaS or cloud ventures who will be in London this Wednesday are welcome to come along, by the way — there will be quite a few people there from some of the country’s key players — but please make sure you register online (using the link above) before you come to make sure your name is on the guest list.
Acting as EuroCloud UK co-ordinator, I’ve found myself in the past few weeks making some snap buying decisions about online services that I imagine are similar to the decisions many SaaS prospects in start-ups and small businesses are making every day. Trade associations, like government organisations, have to be conscious of the need to be economical in how they spend the funds entrusted to them, so I’ve been wary of incurring commitments. Furthermore, the organisation is as cash-constrained as any start-up — until we start signing up members, we’re decidedly pre-revenue. We’re time-constrained too, since none of us involved in the start-up team are getting paid for our time.
Short of time, short of cash, unwilling to make big upfront commitments: how do such customers make their buying decisions? I thought it might be instructive to share some of the thought processes I’ve gone through with readers of this blog.
The need to promote the launch and track registrations for the event created the first really crucial ‘crunch moment’ when a buying decision had to be made. Read the rest of this entry »
November 21st, 2009
Taming the Chatter cloud
Not attending Dreamforce, it appears I missed a telling moment, the irony of which I would have enjoyed had I been there to witness it in person. It seems Salesforce.com has announced a new feature named after that most social of activities, Chatter, which aims to bring to the enterprise the functionality seen in social network tools such as Twitter and Facebook. But as Marc Benioff later told a gathering of press and analysts, it’s not a social network, oh no.
As I wasn’t there I can only go from what’s been reported. But it seems Benioff (no doubt guided by his marketing advisors) has decided to follow the advice promulgated at the recent Enterprise 2.0 conference in San Francisco — by no less a figure than Enterprise 2.0 guru Andrew McAfee — not to overuse the word social in front of business software buyers when talking about, erm, social computing. “I have rarely come across a word that has more negative connotations to managers in enterprise organizations,” McAfee warned his audience two weeks ago.
Benioff this week was devastatingly forthright about why social isn’t going to figure in his sales team’s lexicon when they tell customers about Chatter. According to VentureBeat’s Anthony Ha (my emphasis added):
“Salesforce was careful to position Chatter as a collaboration tool, not a ’social this or social that’ because there’s such a glut of social networking tools, he said, and customers are more willing to pay for collaboration software. ‘We really want to talk about collaboration, because that really is a budget item for our customers,’ Benioff said.”
So there we have it. Chatter’s going to be positioned as a collaboration tool, because that’s what customers are willing to pay for. I can still see problems ahead for this product, on three fronts, but let’s deal with that positioning question first, because I have quite strong views about it.
Interestingly, Microsoft seems to share no such qualms Read the rest of this entry »
September 21st, 2009
Computing by the people, for the people
Sometimes you’re too close to the wood to see the forest. Across several different sectors of computing, participants are talking about a trend to add social, collaborative or self-service features to certain application categories. Perhaps it’s now time to join the dots. As I wrote last week, these are all facets of a broad trend across computing towards the democratization of IT — the people that actually use computing, as opposed to those that make or manage it, are taking control.
For those who haven’t seen it yet, here’s a roll-call of the different categories of business computing where this is in evidence.
Social CRM is the term for a new trend in customer relationship management software that acknowledges (in Paul Greenberg’s words) “the customer’s ownership of the conversation.”
Enterprise 2.0 is (in Andrew McAfee’s words) “the use of emergent social software platforms within companies, or between companies and their partners or customers” to allow user-driven sharing of knowledge and information.
People management is another application category where social computing and user participation is creeping into various aspects of HR and talent management, from social recruiting to performance management.
Ad hoc customization is becoming a staple offering in SaaS applications and is an integral component of platform as a service. Meanwhile, cloud computing is making compute power available on demand to anyone who needs it.
What have I missed out? Add your examples in Talkback below.
September 14th, 2009
Sage dresses SoSaaS in cloud clothing
The software industry’s equivalent of ‘mutton dressed as lamb‘ is a phenomenon I tagged in the early days of this blog as SoSaaS: Same old Software, as a Service (SoSaaS). This is when established software vendors “take any old software package, run it up on a server in a data center, do a bit of financial engineering so customers can pay on a monthly plan, and hey presto!” They imagine they’ve introduced a competitive SaaS offering, but all they’ve really done is demonstrate their complete failure to understand what SaaS and cloud computing is all about.
Rather than fading away, this kind of self-delusion has been given a second wind by the advent of cloud computing, and is now more prevalent than ever. People seem to imagine that implementing a conventional software package on Amazon EC2 or some other cloud platform magically transforms it into a state-of-the-art SaaS stack. I’m afraid not.
Unfortunately, some vendors are so backwards in their comprehension of the SaaS model, they actually believe there’s some advantage for customers in perpetuating the long-winded implementations, painful upgrade paths and orphaned customizations of conventionally licensed packaged software. Here’s Sage CRM chief Joe Bergera talking up his company’s announcement today that “it is piloting a cloud computing edition of the Sage SalesLogix CRM suite for commercial availability in early 2010.” He enthuses:
“While first generation Software-as-a-Service generated a lot of interest, people will look back on this era as a period of big-iron, centralized operations that restrict the ability to customize the solutions … The next wave of Cloud Computing will benefit customers by providing a highly distributed and flexible deployment model that shifts control of the service to their favor, rather than SaaS vendors, so they can better tailor their CRM experience in a way that optimally suits their business.”
The press release goes on to reveal that what he is actually describing is nothing more than a “full-featured, single-tenant cloud edition of Sage SalesLogix using Amazon’s EC2.” Yes, this revolutionary new proposition is just a sorry pile of SoSaaS, dumped in the cloud. Go figure.
August 26th, 2009
WebEx chief quits Cisco for Salesforce.com
Doug Dennerline, a long-serving Cisco insider who took the reins at web conferencing leader WebEx several months after Cisco acquired it, has quit his job as senior VP and general manager of Cisco’s Collaboration Software Group to become executive VP, enterprise sales Americas at Salesforce.com [disclosure: both WebEx and Salesforce.com are former clients].
I interviewed Dennerline in January last year, just weeks after he took up the collaboration software role at Cisco, and he outlined four priorities for that year:
- Get Cisco’s sales team selling the WebEx service
- Finish preparations for a production launch of WebEx Connect, the company’s on-demand collaboration and composite applications platform
- Harness Cisco’s partner channel to sell WebEx
- Tap Cisco’s resources to bolster research and development of new WebEx services
Although WebEx has continued to grow and has brought out some Cisco-inspired enhancements to its offerings, progress on all four points has been lukewarm and it’s no surprise Dennerline found himself tempted by the more vibrant pastures at salesforce.com. (As an aside, I’m also intrigued to see Salesforce.com hiring again at that level after cutting some senior sales management roles just six months ago — as well as wondering what Cisco, one of Salesforce.com’s banner customers, thinks about its supplier poaching one of its top executives).
To see Dennerline jump ship no doubt compounds the demoralization Read the rest of this entry »
May 27th, 2009
Intalio takes multi-tenancy on-premise
I’ve been writing about hybrid cloud models recently, making the case for extending cloud infrastructure on-premise in certain circumstances. I did so with foreknowledge of an announcement that BPM vendor Intalio has had in the works for several months. Last Tuesday, I was in Palo Alto for the public unveiling of Intalio’s new application platform, which is available both on-demand and on-premise — but in a model that reverses the normal polarity of such offerings and challenges the received wisdoms of cloud purists and on-premise diehards alike. It does this by taking some of the core principles of multi-tenancy and moving them on-premise. Read James Taylor for a detailed and thorough write-up of the product announcement. Perhaps most surprising, this challenge to on-demand orthodoxy is led by Intalio’s founder and CEO Ismael Ghalimi, a long-term evangelist for the on-demand model and organiser of the annual Office 2.0 conference, a mecca for advocates of on-demand computing.
As I’ve discussed in previous posts, there are two equally valid ways of achieving multi-tenancy. The first, espoused and evangelized by Salesforce.com, is to share as many tenants as physically possible on a single instance, right down to and including the database layer. The second model, adopted by NetSuite, SuccessFactors and many other leading SaaS players, is to replicate instances across large numbers of low-cost commodity hardware machines, sharing databases for smaller customers but having larger accounts run on their own virtual database instance. This is still multi-tenancy because the replicated database schemas are identical. There is nothing that ties any customer to a specific instance, leaving the provider free to distribute and manage instances in whatever way it sees fit.
What Intalio has done is to borrow this principle of replicated instances and apply it to its on-premise implementations, as Ghalimi explained last Tuesday:
“One of the lessons that we’ve learned in the past 20 years is that letting customers change application schemas is a very bad idea. We’ve learned that lesson and the way we implemented our CRM application is, you cannot change the standard objects. All you can do is expand them. You can add fields, but you can’t remove them. You can rename a field but you can’t change its logical name. So any modifications customers do will not break the schema. We’ve learned a lot from Salesforce.com. They did a really great job there.”
This is a perfect illustration of a principle that — in opposition to Microsoft’s ‘Software-plus-Services’ rhetoric — I prefer to call services-plus-software. In other words, architect for the cloud first, and then (if you must) Read the rest of this entry »
May 8th, 2009
Another week, another $70m vote for SaaS
After last week’s announcement of a $75 million VC funding round raised by Workday, I thought it would be a while before I heard of another SaaS company raising a similar sum. In the event, it took just a week. On Wednesday, on-demand email marketing provider ExactTarget announced a $70 million round.
It seems there’s plenty of VC money available for the right SaaS proposition, which bodes well for the industry’s prospects. I spoke today with ExactTarget’s CEO Scott Dorsey and he told me the company had found “an immense amount of interest from late-stage VCs that don’t usually get the chance to invest in such a late-stage SaaS venture.”
ExactTarget is something of a special case in that it filed for an IPO in December 2007, but found its plans thwarted by the bleak IPO climate prevailing since then. The new round of funding brings in roughly the same level of cash as the company was seeking from the IPO, and coincides with the company finally withdrawing its S-1 filing. In a VentureWire interview, Rory O’Driscoll of new investor Scale Venture Partners explained its motives:
“We can’t control when the IPO window opens, but frankly we can take advantage of the conditions … This is an opportunity to own this company for the next couple years while it continues to grow.”
O’Driscoll, who is joining ExactTarget board, knows quite a bit about SaaS growth having invested in Read the rest of this entry »
April 2nd, 2009
SaaS channel models morph into shape
Mark down NetSuite’s announcement today of SuiteCloud Connect for Salesforce.com (all Techmeme coverage) as a victory for the cloud over individual vendors. Sure, this is still about who owns the biggest slice of the cloud (did you notice the resemblance between NetSuite’s SuiteCloud diagram and a pie-chart? Guess who got the lion’s share). But it represents a blow for Salesforce.com’s own-the-whole-ecosystem AppExchange model, just as much as it’s a step back from NetSuite’s former rhetoric about standardizing on a single vendor’s suite for all your needs. [Disclosure: NetSuite is a current client and I've also done work recently for Salesforce.com and Intacct].
It signals that intermediaries are going to have more power in the cloud and we’re not going to end up having to choose between just a handful of mega-vendors. Instead, interoperability (dictated by the cloud, not a self-appointed elite) is going to be the dominant meme and vendors will have to empower third parties to link their application platforms wherever customers can find the most value. The open cloud wins the day.
There’s a strong message emerging too about the importance of channels in delivering cloud and SaaS solutions to customers. While NetSuite is clearly motivated by being able to market its ERP and ecommerce platform to Salesforce.com’s SaaS-savvy customer base (and who in this market doesn’t covet a slice of that action?), it’s increasingly relying on a number of different kinds of channel partners to reach the market. At first glance, the partner ecosystem for SaaS doesn’t look that much different from the channel partners that traditional software vendors have worked with. But the detail of how they execute is much changed. Read the rest of this entry »
March 9th, 2009
How to make freemium pay
At the heart of a ‘freemium’ business model is a notion that makes me viscerally uncomfortable: giving something away for nothing. Services are given away free in the expectation of being able to sell paid-for, premium services to a subset of customers later on. In essence, the free subscriptions are a marketing cost that is recouped once the premium services start to take off. Fair enough, but in the heady atmosphere of recent years, some people have driven this model to extremes. Twitter and Facebook are examples of what I would call the ‘lunatic fringe’ of the freemium business model: enterprises that give away services without any preconception of how they’ll eventually recoup the cost of acquiring and servicing those free subscriptions. From a business perspective, this surely is unadulterated folly.
In more cautious hands, the freemium business model is one that can work well, and in this posting I’ll present three examples that show how it can work for SaaS providers serving the business market. Despite my uneasiness, freemium is a business model I’ve experienced for myself, having practised it with some success in a couple of website ventures. The trick is to strike the right mix, combining a virally attractive free service that reaches the right prospects, together with a distinctive set of premium services that offers those prospects a clear value proposition.
My first example provides some encouragement for free-of-charge consumer services that are looking for ways to extend into paid-for business services. This is exactly what online file storage and sharing provider Box.net has done. The basic service is intensely viral, and the paid option simply adds features that make the service more business-friendly, such as multi-user accounts. With this simple proposition, the company has already recruited Read the rest of this entry »
January 27th, 2009
Oracle puts a price on single-tenancy
Oracle today announced a new centrally managed single-tenancy option for its SaaS CRM OnDemand application, along with various other features including unlimited custom objects. Existing prices remain the same, at $70 per user per month for the multi-tenant version and $125 per user per month for the previously available single-tenant enterprise version, which is a completely independent instance for which the customer can dictate its own upgrade and patch schedules.
The new ’standard’ single-tenancy option comes in at $90 per user per month. It’s still a dedicated server but, unlike the ‘enterprise’ option, Oracle decides when it gets patched and upgraded. “You can get your own stack of the application but we’ll still manage it and maintain it on our standard schedules,” Oracle’s SVP of CRM OnDemand Anthony Lye (pictured) explained to me in a briefing late last week.
What’s the benefit? Lye says that it’s having single-tenant instances of each component of the application stack, including the database, enabling benefits such as custom performance tuning. He calls this option a ’sweet spot’, perhaps reckoning that most customers will be happy to stump up this small extra delta to have a server (even if only a virtual one) that they can call their own.
What I found interesting is the way Oracle has effectively put a price-tag on single-tenancy, all other things being equal in terms of shared management and data center infrastructure — and it’s set it at $20 per user per month. Assuming Oracle is operating on the same gross margins as Salesforce.com, Read the rest of this entry »
Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
Subscribe to Software as Services via Email alerts or RSS.
SponsoredWhite Papers, Webcasts, and Downloads
- Email Security and Archiving - Clearer in the Cloud Google The time is NOW for businesses and organizations of all sizes to implement ... Download Now
- The True Costs of Virtual Server Solutions VMware In an economic environment that is repeatedly heralding the message "do ... Download Now
- Why Isn't Server Virtualization Saving Us More? A Few Small Changes May Dramatically Increase Your Efficiency VMware Companies have rapidly adopted server virtualization over the past few ... Download Now
Recent Entries
- EuroCloud UK and a lesson in SaaS marketing
- Taming the Chatter cloud
- Can the Economist entirely be trusted?
- Microsoft cuts BPOS price to squeeze Lotus
- Cloud cuts everyone’s cost of ownership
Blogs From Our Sponsors
Most Popular Posts
- Can the Economist entirely be trusted?
- Cloud cuts everyone's cost of ownership
- Microsoft cuts BPOS price to squeeze Lotus
- Taming the Chatter cloud
Top Rated
Premier Vendor Content Whitepapers, webcasts & resources from our Power Center Sponsors
- Microsoft Dynamics CRM Online - Free Six-Month Trial for Eligible Organizations
-
Microsoft Dynamics CRM Online provides fast online access, simple contact management and better sales performance for a low monthly cost - the best value on the market today.
- Learn more about the free, six-month trial offer>>
- The more you simplify, the more you save
-
When you transition from your existing Red Hat environment to SUSE Linux Enterprise from Novell, you can recognize dramatic cost savings, perhaps as much 50%
- Learn more >>
- Reduce risk. Reduce complexity. Increase reliability.
-
A simplified IT environment isn't just less complex. It's also more reliable. Standardize on a single Linux platform with SUSE Linux Enterprise from Novell, and get the world's most interoperable Linux
- Learn more >>
- Keep Up With The Latest In Document Management with The DocuMentor.
-
Doc delivers the scoop on today's enterprise content management, printer maintenance, and all other issues related to document management. It's the DocuMentor Blog.
- Learn more >>
Archives
ZDNet Blogs
- All About Microsoft
- The Apple Core
- Between the Lines
- BriefingsDirect
- Collaboration 2.0
- Dev Connection
- Digital Cameras & Camcorders
- Ed Bott's Microsoft Report
- Emerging Tech
- Enterprise Web 2.0
- Forrester Research
- Googling Google
- GreenTech Pastures
- Hardware 2.0
- Home Theater
- iGeneration
- Irregular Enterprise
- IT Project Failures
- Laptops & Desktops
- Lawgarithms
- Linux and Open Source
- Managing L'unix
- The Mobile Gadgeteer
- On Sustainability
- Rational Rants
- The Semantic Web
- Service Oriented
- Smartphones and Cell Phones
- Social Business
- Social CRM: The Conversation
- Software & Services Safari
- Software as Services
- Storage Bits
- Team Think
- Tech Broiler
- Technology and the Global Supply Chain
- Tom Foremski: IMHO
- The ToyBox
- Virtually Speaking
- The Web Life
- ZDNet Education
- ZDNet Government
- ZDNet Healthcare
- Zero Day
White Papers, Webcasts, and Downloads
- Reducing Server Total Cost of Ownership with VMware Virtualization Software VMware VMware virtualization enables customers to reduce their server TCO and ... Download Now
- Why Isn't Server Virtualization Saving Us More? A Few Small Changes May Dramatically Increase Your Efficiency VMware Companies have rapidly adopted server virtualization over the past few ... Download Now
- Five Steps to Determine When to Virtualize YourServers VMware Server virtualization isn't just for big companies. Entry-level ... Download Now
SmartPlanet
- Thought-provoking progressive ideas on diverse topics that intersect with technology, business, and life, and matter to the world at large. Visit SmartPlanet
- More from IBM
-
- Can your business work smarter? Learn more about Lotus Symphony
- Learn how to work smarter and optimize cost using the IBM Smart SOA approach Download the eBook
- Smarter ways to make smarter products Read the brief from IBM
