Monday Aug 02, 2010
Ideal ISVs for Cloud hosted SaaS
In 2009, we did some interesting market validation to see how potentially large the Australian SaaS (Software as a Service) ISV (Independent Software Vendor) market was. As part of this exercise, I created a chart to help me to find the ideal candidate ISV for the cloud hosted SaaS provisioning project we were working on at that time.
The following diagram is that chart:
On the vertical axis we were focusing on the characteristics to on-ramp a new customer. With the horizontal axis representing the amount of consulting work required. The ideal candidate for us would of been an ISV, where the customer can self provision through the Internet without need for upfront consulting.
The intriguing item that arises from this, is that a traditional IT company focuses on selling Consulting services, or for that matter as an ISV it is potentially the Channel that provides the consulting. Here in Australia, we found few ISVs that purely concentrated on development of a product. In fact, it would appear more so, that consulting organisations have software that helps uniquely differentiate their consulting offerings in a competitive situation.
That then means that the complexity to get a new customer onboard quickly is not a priority. There were long sales cycles, with long implementation projects, where the business grew through providing more professional services.
Now this of course was in strong contrast to what we had researched on the Internet. The growth rates were going to be coming through SaaS enablement of software (reduce post-sales signup complexity and cloud hosted) to get customers onboard quickly. Or was it?
Well it is, but not within the Australian ISV markup that was concentrating on selling just within their local markets. The volumes of customers just aren't there. For some product offerings the market is for all intensive purposes saturated and their customers, at that time were not asking for SaaS based offerings.
As we were unable to find multiple ISVs that considered onramping new customers a current or perceived future issue we were unable to find within the Australian market, our ideal ISVs. I'm sure that one day they will exist, but I'm not just not sure when!
Tags growth saas isv complexity cloud | Comments 0
Sunday Nov 30, 2008
Industry Clusters - What's Microsoft up to?
A few weeks ago, I received an invite by email to a local AIIA (Australian Information Industy Association) event. The event was for the launch of SouthAustralia.NET.
The following is the introductory paragraph: "AIIA together with Microsoft and the Government of South Australia is pleased to announce the launch of South Australia.NET (SA.NET) Industry Development Cluster. SA.NET is primarily designed to bring together local ICT organisations and promote South Australia as a world class location for software development. ".
I thought the sentiment regarding "world class location for software development" was excellent but had a niggling suspicion that this might have been standard copy used in the other announcements interstate. However, for those of us focused on Open Standards based software development, we were immediately concerned at the message this was sending regarding Microsoft in our state at the exclusion of other technology.
For those that don't know me, I'm also completely Microsoft Free, and have given up on using all their software (blog entry here on the experience).
A few persons and organisations locally, have seen this impartiality towards Microsoft by the SA Government and the AIIA. Now we are starting to organise ourselves and do something about it. It has been proposed that we establish our own Industy Cluster, with the current proposed name of joltSA (Java and Other Leading Technologies South Australia). You can't call something like this, everything but Microsoft technology, but that's what it appears to be (I'll write in another post at a later date why I think there is so much perceived Microsoft mindshare in our geographic area).
But more importantly, I've started asking myself the question - "what is an Industry Cluster?". The classic wikipedia definition is related to associated businesses that are working together in a geographic area to effectively create a better supply chain. In the software industry, the most famous one of the past has been Silicon Valley. In this case, it brought together startups, techos and venture capitalists into closer geographic proximity to each other.
Thinking through this, it sounded like a term that was used to describe something that was successful in the past. So there must be alternatives that take into account what current technology can facilitate. In the wikipedia article one was suggested, being Hubs and Nodes - "is a geographic model, explaining how linked regions can cooperate to fulfill elements of an industry's value chain, and collectively gain sufficient mass to drive innovation growth." But the most important point I think from the definition is "The model of hubs and nodes builds on Porter's cluster model which served well in the past, but as businesses and regions around the world have adjusted to the realities of globalization, the concept of clusters is becoming outdated.".
You wouldn't think that Microsoft would be promoting an outdated concept, such as an Industry Cluster would you? So what were Microsoft really up to?
I went back to the Launch Event email and thought a little more about "Guest speaker Peter Watson, Director - Software + Services, Microsoft Australia, will give you a taste of the next wave from Microsoft, the exciting future ahead and derive early competitive advantage.". Ah ha, this is about rallying the troops towards the future Microsoft Azure platform I thought. Low and behold the AIIA and Microsoft apparently were also promoting Microsoft BizSpark (hadn't heard of this before) at the event, which is targeted at startups. Now this made more sense, Microsoft sold this very well to the different audiences with the safe and warm language that each different type of audience wanted to hear.
I read the terms of the Microsoft BizSpark program and you need to be a startup less then 3 years old, that doesn't host its own service to be a member. A smile crossed my face, as I understood what they are doing. Have you worked it out yet?
If the future is the cloud, as promoted by Ray Ozzie, they need applications that can run on it. Deriving innovation internally in large corporates has increasingly become more difficult, thus the need for external organisations (startups with the innovation, that lack the culture that stifles it) to provide that organic innovation to allow growth. However unless they capture this innovation, and tie it in to run on their platform, they will have a bunch of expensive cloud infrastructure services sitting there, that in essence is not providing much real value to the End User consumers.
So now that we have been nicely distracted, its time to come out of the clouds. Its time to create larger mind share about other technologies that will be still provisioned on-premise (it pays the bills, well tries to) at this time and off-premise in the future. How to do so, is what I spend a lot of time thinking about.
Tags software industry clusters joltsa nodes hubs networks | Comments 0
Cloud computing from the couch
I found this panel discussion from a new twitter follower today lucidera. It gives great insight into how some of the market leaders in this space perceive the future of SaaS businesses.
Tags google oracle cloud salesforce saas amazon sap adobe | Comments 0
Wednesday Oct 15, 2008
Uncertain times - can SaaS based applications be used to get an edge
I've been thinking a lot recently about what the potential impact may be to new IT projects with the recent credit crunch. Some believe that there will be increased belt tightening in business in general, with few new capital projects being approved.
Is this the opening that we should be looking for to introduce SaaS applications?
I don't think it will be. In the past, some basic primary research that I did, suggested that over 80% of ICT budgets was used to support existing systems. Out of the remainer of that ~20%, a similar percentage was spent on enhancements to existing systems. So if a capital project is required, to upgrade existing systems, the path of least resistance will be used to reduce risk. The status quo will be maintained to preserve existing operations.
What I'm looking for is those variables that are going to suggest a reduction in Op Ex budgets.
To me the driver is about improving the operating efficiency of business to allow them to compete more effectively against their competitors. So a smart business to me, will be looking to offset capital and op ex costs to get an edge at the moment whilst their competitors are distracted. So these businesses that break with tradition and use SaaS based applications, may just achieve that.
If you think you have spotted some doing just that, let us know.
Saturday Aug 30, 2008
Getting off of SaaS
The SaaS purist are always suggesting that a key characteristic of a true SaaS service provider, is to have the ability for it's clients to easily take their data and move to another service. Whilst in principle I agree with this, I think clarification is required.
If you've been using a properitary system like SAP, your data is in their format, stored in some relational database system. Its near impossible to migrate to another ERP, without a considerable amount of work.
The key point is that for the most part, there is no common way, to describe and hence then store your data in some intermediate format. This would hold true, regardless if the service was on-premise or off-premise.
Now I'm looking at Salesforce.com, and am trying to investigate the work required to move to say SugarCRM, either hosted myself or by an on-demand provider. Are there tools available for me to export my complete CRM data from Salesforce.com and then import into SugarCRM? Not that I can find.
I'm not saying that I don't like Salesforce.com. In fact, I'm liking the tool but believe there may be cheaper options that are more appropriate for our circumstances. For example I want to integrate to our existing LDAP server and also maybe to my local Apple Address Book on my Mac Book Pro.
Now Salesforce, gives me means to export data through reports. I haven't tried it yet, but looking at the process, it seems to have all the fields, including the additional ones that I created. Thus I can export data in some form, to potentially be loaded elsewhere. But this is not the same as the expectations that I think most users would have to then be able to utilise it quickly on the new service. Whilst there is some flexibility on importing information into Salesforce, for existing accounts and contacts. I can already see that the history of what has occurred would possible be lost.
But Salesforce is regarded as a leader in the SaaS space. Yet the capabilities are not there as readily, I would say, as the purists would expect to export or import my complete data. I think, for most users, once the commitment has been made to utilise the service, that they acknowledge that the real commitment, will be longer then the life of the initial subscription.
The need to export data, and in what format, can only be determined, at this time, once a new service has been selected. Correct me if I'm wrong here? SaaS providers can tick the box, they can placate some of the Purists, but is it really what the person paying the bills want?
Tags sugarcrm salesforce crm saas data vendor life+cycle | Comments 0
