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Netbooks Resurfaces from Hibernation as WorkingPoint: SaaS for SMB with Nicer UI but Much Less Functionality

I’ve previously covered Netbooks, provider of an Integrated SaaS Business Suite for Very Small Businesses.

The company had an affordable On-Demand integrated business management solution for the   VSB – very small businesses, the “S” in SMB / SME: typically companies with less then 25 employees, sometimes only 3-5, and, most importantly, without professional IT support, in which case Software as a Service is a life-saver.

NetBooks tried to cover a complete business cycle, from opportunity through sales, manufacturing, inventory / warehouse management, shipping, billing, accounting – some with more success then others.   The process logic, the flow between various functional areas was excellent, but it was rendered almost unusable by a horrible UI. And it didn’t scale… so the company disappeared for a long year, completely re-building their code base.

Read on

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SAP Discusses SaaS Strategy

John Wookey has a tough job. The former Oracle Exec, currently EVP @ SAP, the Enterprise Software leader is supposed to charter SAP’s foray into On-Demand – in a company whose bread-and-butter is clearly in installed applications and which still largely considers a threat to its traditional lucrative business.

He spent the first 6 months crafting the new strategy, which he first announced at the SIIA OnDemand Europe conference in Amsterdam.

Continue reading

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Atlassian $timulus Package Inching Towards Finish Line

Quick update on the Atlassian $timulus drive I previously reported about:  at 2pm on the last day of the promotion, they are at $93K – the $100K donation is realistic… but they may need a little push.

So I decided to put my money (well, a little) where my mouth is and have just purchased 10 5-person  licences of Confluence, the market leading enterprise wiki.  Not that I can use them all – so I will find a way to give them away in the future.

If you want to help them donate $100K to Room to Read, you can do your part easily … and just as a reminder, you’re buying a $1,200 licence for $5.   What a bargain to close out the week. 🙂

Update: With 3 hours to go Atlassian is just $2.5K short of reaching the target.  See coverage map at Mike’s blog.

Update #2: Ah, the drama of the last minutes:

$640 short of $100k… with 20 minutes to go, my maths says we’re just going to miss! 🙂
$590 short. Need $30/minute now… at least we did $35 last minute! 🙂
Just tipped $99,510… I wonder if we should just leave it up for 10 minutes extra, or does that seem dodgy?
Well… computer says it’s…over $100k!!
Woo! Woo!!! Dancin’ around the room. Atlassian Stimulus Package 400% of $25k goal. What a week. Simply staggering. THANK YOU EVERYBODY!
Atlassian Stimulus Package (preliminary) final total – $100,350 for Room To Read in 120 hours from 7284 _awesome_ startups and teams!!

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Atlassian $timulus Package Supports Charity. Two Days Left To Get Your (Almost) Free Confluence or Jira Licence.

This must be do-good-week.  Amongst all the talk about Ashton Kutcher’s challenge to CNN, how the follow-on Oprah show pushed Twitter to never-seen height, little attention was paid to the small fact that this initiative generated over $1 Million donations to Malaria No More.  Ashton started with his $100,000 check and was soon joined by Demi Moore, Ted Turner, Oprah and I don’t even know who else .. I lost count at $1M.   Hype aside, this is a major contribution to a good cause.

This week we’re also seeing a for-profit company, Atlassian drive to raise $100,000K for the benefit of Room to Read, an organization that builds schools, libraries in rural communities in Nepal, Cambodia, Vietnam, Bangladesh, Laos, Zambia …etc.  Doing good is in Atlassian’s DNA, likely coming from the co-Founder, who is a major Kiva Supporter.  His company had set up the Atlassian Foundation which donates basically 1% of everything:

  • 1% of company and employee time to Foundation projects
  • 1% of company equity to the Foundation
  • 1% of our products to non-profit groups

But wait!  This isn’t a post about charity only.  There’s a Deal in it for you!

The Atlassian $timulus package is a 5-day drive, during which you can get either Confluence, the excellent Enterprise Wiki, or Jira, the issue tracker – Atlassian’s first product that’s still an IT favourite  for $5 for 5 users.

Now I hear you ask: is that $5 per person per month?  That would by typical (actually low) pricing for most SaaS offerings.   NO!  It is:

  • A five-user licence (ie. $1 per person)
  • For a full year
  • For the full-featured entrerprise strenght products

My only regret is that it does not involve the hosted versions of these products.   But if it’s the downloadable, installable version, what’s this per year licence?  Most enterprise software is sold with a perpetual licence: you can use it forever.  But then the vendor pushes the (almost) mandatory maintenance fees to the tune of 20-25%, and major new releases every 4-5 years.

Atlassian does not play such games, their philosophy is transparency and simplicity. Software should be easy to learn, easy to use and easy to buy.  Hence the annual licence whish involves support. (Update: I misunderstood this part: the licence is a perpetual one, the additioal annual fees are for maintenance / support, and the are optional.)  And for comparison, the minimum annual licence for both Confluence and Jira is $1,200.

So Atlassian is essentially giving away $1,200 licences for free – but it’s actually a lot more.  This isn’t just your introductory price.  Customers who purchase during the $timulus week (only two days left) are locked in to their $1 per user price for the lifetime of the product, and those fees will be donated as well.   That goes way beyond giving up revenue – they can’t possibly provide support for $1 a year, so Atlassian is reaching into their pockets big time for years to come.

The initiative appears to be more wildly popular than they expected. The initial goal was to raise $25,000 for Room to Read, and they exceeded that target on the first day – hence the new objective of $100,000K.

Early this morning they were at 66% of the increased target:

Now, before someone thinks I am doing a paid commercial here: I am not receiving any form of compensation or incentive from Atlassian.  I simply like what they are doing.  A lot.

But I’m not naive.  This isn’t just charity.  It’s damned good marketing – in more ways then one.  First, as you may suspect is Brand recognition.

The second is perhaps less obvious: Atlassian’s initial product, Jira took several years to take off – the second, Confluence had much faster growth.  Part of their secret sauce has always been relying on a very loyal, very satisfied customer base, mostly IT-types who buy additional products from their trusted vendor.

So yes, Atlassian is seeding their market with thousands of free customers this week.  Which is fine, I’ve said before: you don’t have to be purely altruistic to do good.

Update: The Atlassian $timulus Package is now listed in Consumerist’s Morning Deals, along with Blu-Ray Discs and Casio Cameras 🙂

(Cross-posted from CloudAve. To stay abreast of news, analysis and just plain opinion on Cloud Computing, SaaS, Business grab the CloudAve Feed here.)

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Business ByNetSuite Goes After SAP, While The Giant is Sleeping – Where is Business ByDesign?

Ben recently reported on how NetSuite is going after Salesforce.com, by announcing their Renewforce program.  Today NetSuite is going after bigger  fish: the leader in Enterprise Software, SAP.

The aptly named Business ByNetsuite program guarantees at least 50% savings to current SAP R/3 customers relative to  – watch this! – the annual maintenance fees they are now paying to SAP.  Yes, it’s not a price-to-price comparison.  With the perpetual licence model customers pay upfront, but are still forced to pay annual maintenance fees – with SaaS there is only a subscription fee, and now NetSuite proves it can be half of only the maintenance component of traditional software’s TCO.

Read on to find out how SAP’s own blunder around their excellent product, Business ByDesign opened the opportunity for Netsuite…

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Cloudy Fusion

El número 14

Image by wicho via Flickr

The Enterprise Irregulars took over CloudAve… well, sort of, forcing us to release an article early.  Eran Kampf had a post lined up for Monday morning about Larry Ellison’s Cloud Envy, when all of a sudden fellow Irregular  Anshu Sharma had a humor attack and came out with a hilarious post. All he did was replace Cloud Computing with Fusion in Larry’s famous rant, and voila!:

"The interesting thing about Fusion is that we’ve redefined Fusion to include everything that we already do. I can’t think of anything that isn’t Fusion with all of these announcements. The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?"

"We’ll make Fusion announcements. I’m not going to fight this thing. But I don’t understand what we would do differently in the light of Fusion other than change the wording of some of our ads. That’s my view."

Wow.  This variant of Ellison’s speech makes a lot of sense, referring to his own elusive Fusion applications.   Even Vinnie Agrees. smile_wink

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How Software Can Be Resilient to Recession

Are we heading into Recession?  The “Big R” talk of early this year quickly subsided, economic growth returned, the markets appeared to vindicate the optimists.  US Presidential Candidate John McCain repeatedly said the economy was fundamentally strong… until just days ago, when he quickly switched to declaring a crisis.  The Wall Street Journal says we’re in the Worst Crisis Since ’30s, With No End Yet in Sight.

I don’t claim to be an expert economist, so whether the Big R is looming is not my call – but if you believe we’re in a strong economy, I have a bridge to sell you.  Let’s just focus this discussion on how Software businesses can survive in a financial crisis, which is undeniably here.

Not all will survive, and it’s probably healthy they won’t.  Tim O’Reilly, Father-of-all-things-Web-2.0, asked the question at the Web 2.0 Expo last week:

Global warming. The U.S. losing its edge in science and technology. A growing income gap. “And what are the best and the brightest working on?” O’Reilly asked, displaying a slide of the popular Facebook application SuperPoke, which invites you to, among other things, “throw sheep” at your friends.

“Do you see a problem here?” he posed, showing another slide of the popular iPhone app “iBeer,” which simulates chugging a pint. “You have to ask yourself, are we working on the right things?”

The poster-child of the Web 2.0 boom may very well become the symbol of what went wrong:

  • useless
  • consumer-only
  • ad-driven

Actually, the problem is not what they do, but how seriously they were taken.  Will Price, a very smart VC said long ago:

It may well be that Slide raising $55m from mutual fund companies at $500m+ pre-money will be the “what were we thinking” moment of the current cycle.

I’m glad they did not go public, at least not a lot of people will get hurt holding the bag.   But enough of what’s wrong, here’s what works:

  • go where the money is, and that’s businesses (“Enterprise” vs. consumer, even if it means small business)
  • deliver value – useful functionality that improves business
  • charge for it – companies actually prefer to pay for reliable, good service.

The last point brings up the price issue.  Credit will dry up. Whether we’ll officially declare Recession or not, the fear of the Big R is enough for corporate budget cuts, the disappearance of any CAPEX spending. Even worse, an entire sector almost disappeared as IT buyers.  Did you know that Lehman Brothers spent over $300M on IT in just the last quarter, right before declaring bankruptcy?   How do you sell in this environment?

The after-bubble nuclear period of “no IT spending at all” found me at a startup in 2001-2003. We did not exactly hit it big, but did not go under, either, and that’s because our model allowed us to get in the door way below the threshold that would have required higher authorization. Not classic SaaS, rather SES (Software Enabled Service), we were essentially data providers and often got into an “enterprise” account at $3k for the first month … eventually ramping up to annual $60-$100K.   Anyone familiar with Enterprise Sales knows the term Economic Buyer:  typically getting involved later at the sales cycle, approving or nuking the deal.  Well, we saw no Economic Buyer: being under the threshold, we sold to the User directly.

Of course my little business is not the only proof: Salesforce.com & WebEx thrived during the last recession. The secret is the business model: pay-as-you-go.  SaaS offers lower risk to enter, no initial cash layout, the subscription fees come out of OPEX vs. CAPEX, and is often approved by the User, not the mysterious Economic Buyer.  The barrier of entry is much lower: once you’re in, it’s up to you to grow.

In fact I suspect the looming downturn will accelerate the structural changes in the software industry: SaaS players will thrive,  traditional on-premise vendors will shrink, many will disappear.

That leaves a final point to discuss: financial solvency.  For startups, it will be increasingly hard to find investors.  For larger businesses the lack of late-stage investment, the credit crunch may be a serious impediment to expansion.   Discover the beauty of bootstrapping – you actually get to do what you believe is right for your business, not what your Board tells you.  Do less, take small steps.  Frugality is key to survival.  Small is beautiful will get a new meaning.

In summary, Software businesses that combine good old business sense: frugality, spending wisely, delivering value to businesses and getting paid for it, with a new business model, SaaS are likely winners in the downturn.  The rest are playing musical chairs. (Oh, and the bridge is still available)

(This post originally appeared on CloudAve.  Keep informed by grabbing our feed here.)

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CloudAve Launched – and Thank You, Harry

(OK, I sinned. Mea Culpa.  I’ve just cross-posted an entire article, which is not the best behavior. But it’s not every day that I launch a new group blog – so consider this my shameless self-plug, and please subscribe to the feed.smile_wink)

We must be a crazy bunch on a suicide mission.  Why else would we launch a new blog focused on Cloud Computing and Business, when it’s just a fad that will collapse in two years?

Harry Debes, CEO of Lawson Software is a respected Enterprise Software industry veteran, but I’m afraid for all his achievements he’ll go down in history as the man who grabbed headlines with a fatally wrong call.  Of course not all wrong calls hurt one’s reputation: IBM’s Thomas Watson is still an industry legend despite the famous quote incorrectly attributed to him:

” I think there is a world market for maybe five computers“

The small difference is that what Thomas Watson could not fathom in 1943 ended up putting IBM on an amazing growth trajectory,  while Harry Debes’s view may just turn out to be fatal for Lawson – or to quote my Enterprise Irregular friend, Vinnie Mirchandani:

“That’s what American and Delta said about SW. And GM and Ford said about Japanese cars. And Sears and Wards said about WalMart.”

Another quote by Vinnie, closer to our industry:

“Dun & Bradstreet, which GEAC acquired for a song, was one of the most spectacular slides in the software market. In less than 5 years it went from dominant position to a distress sale as it missed the client/server wave in early 90s.”

I’ve seen that one close, fortunately for me from SAP’s side – the winner in that round.  We’re witnessing another tidal wave now, the shift to Cloud Computing.  It won’t happen overnight, but those who completely ignore it will vanish.  Some of my fellow Enterprise Irregulars elaborate more:

  • Vinnie Mirchandani points out that SaaS is what more and more customers want, and those who stop listening to customers inevitably hit the wall sooner or later.  Need proof?  How about this 100% SaaS customer, showcased at the recent Office 2.0 conference?
  • Jim Berkowitz  of CRM Mastery fame agrees,  adding that calling people, potential customers “stupid” never leads to any good.
  • Bob Warfield makes the case that even if we ignore what customers want and only consider profitabilty, Debes is wrong, Salesforce.com is almost as profitable as Lawson, but grows much faster, while Conquer, another SaaS success story is actually more profitable than Lawson is.
  • Jason Corsello adds that Lawson actually launched a SaaS offering last year, but experienced lackluster customer response largely to pricing and deployment issues … so now that they couldn’t pull it off, the declare the entire market doomed.
  • Josh Greenbaum concludes: “SaaS isn’t collapsing, it’s only just getting started“.

I can live with that… it’s only starting… so we’re not a suicidal bunch, after all.smile_wink But thank you, Harry Debes, for sparking a great discussion.

If you read just the few articles I’ve quoted above, you get a fairly good picture of the many benefits the Software as a Service model offers.  Let me add a few of my personal favorites:

  • Extended reach – small businesses can now have business functionality previously only available and affordable for large enterprises.
  • Commoditization of the software market – commoditization hurts most companies, except the few who drive it, but guess what – it’s great for customers.
  • End of Bloatware  – for the first time SaaS vendors can run stats and observe what features are actually used by customers, so they can cut out the fat and enhance the in-demand features.
  • New Business Models, like benchmarking – based on anonym aggregate data provide your customers with performance metrics.  Even newer business models we have not even imagined yet.
  • Dramatically changed Sales and Marketing model: pull vs. push.  Instead of the traditional sales model it’s all about transparency, information, letting informed customers find you.  The Product sells itself and your Customers are your Marketing team.

We’ll be writing about these and more. I’m a “business application guy”, so I mostly talk about SaaS – but our name is Cloud Avenue, not SaaS Avenue, for good reason: fellow blogger Krish will talk about it soon.  By the way, Krish and I got to know each other through our blogs – just like my fellow Editor, Ben Kepes, and just about all other contributors. We also have our CloudLab – for product / service reviews.  Yes, we will report on products, but do not strive to be a mini-TechCrunch: we have no intention to report about everything new.  We’re not a news-blog.  We’d rather sit back, analyze a market, find key players, then produce a series of reviews / comparative analysis.  Quality before quantity or urgency.

We’re believers in Cloud Computing, but  not over-zealous cheerleaders.  Just as I’m finishing this post, another SaaS debate erupted, which prompted Anshu Sharma to note: “there must be a Sky is Falling Support Group“.  The really notable part of the Cloud-Filled Debate @Forbes is Nick Carr’s responses: not because of the Big Switch author’s unquestionable “cloud-bias”, but because of how realistic he is:

Forbes.com: Is cloud computing over-hyped?
Nicholas Carr: At the moment, yes, and that’s typical for technological advances.

What’s your imagined time line of the adoption of cloud computing? Will it take years? Decades?
If you’re talking about big companies, I would say it will be a slow, steady process lasting maybe 15 to 20 years.

On what Gartner Research analysts call “the cycle of hype and gloom,” where do you think cloud computing is currently positioned?
It’s definitely near the peak of its hype. The doom period, when the media and IT managers realize the challenges ahead, is likely coming soon. But regardless of hype or gloom, the technology will only keep progressing.

Overhyped, slow process, doom is coming… has Nick Carr switched sides?  No, he is just being realistic – and that’s what we need to do here  @CloudAve, too. We will talk about integration problems, security issues, privacy concerns, even legal ramifications – many of these I don’t claim to know much about, which is why it’s great to have a diverse team of authors with complementary areas of expertise. And our door is never closed: we welcome guest posts, and who knows, you may feel inclined to join us as as a regular writer…

Finally, we could not afford to bring you CloudAve without sponsorship.  My regular readers know I’ve been an advisor to Zoho for years now – I’ve found them to be a showcase for a lot of my ideals.  Zoho stepped up as exclusive sponsor of CloudAve.  This does not make us a Zoho PR outlet, in fact they can expect less coverage here than they got on my personal blog.  We enjoy complete editorial independence.

What we do not have, and will not have is any form of advertising.  None of those flashy banners, boxes, making the site close to unreadable. Just pure content.  And since we are not dependent on page views, we can afford to offer our content under a Creative Commons licence.  Yes, it’s all yours, take it – just don’t forget attribution.

So here we are – welcome to CloudAve. We hope you will follow us.   And once again, thank you, Harry, for all the attention to Cloud Computing.smile_wink

P.S.  The CloudAve platform  is not exactly in nice order yet. It’s work-in-progress.

So for now, all I can do is apologize for the shabby appearance, like I did at a previous move – that one turned out quite well, didn’t it?

And talk about move – I am not abandoning this blog either, so I hope you continue to follow me both here and on CloudAve.

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Zoho CRM Enterprise Edition @ SMB Price

This morning Zoho announced the Enterprise Edition of their CRM product.  The key updates are:

  • Introduction of Role-based Security Administration
    • Profiles for managing CRM module-level permissions
    • Roles for modeling organizational hierarchy and setting up data sharing rules
    • Groups for sharing the data among various departments
    • Field-level security for controlling the access rights (View or Edit) of fields in CRM modules

  • Enhancements in product Customization & Data Administration
  • Multi-language Support (11 Languages)
  • SSL Support for Professional & Enterprise Version
  • Integration with Zoho Sheet
  • Improved Business Functionality
    • Automatically update Stock information once the Purchase Order is approved
    • Find and Merge the duplicate records in Vendors module
    • Convert Quote to Sales Order or Invoice in a single click
    • Convert Sales Order to Invoice in a single click
    • Add account information automatically while creating quotes/orders/invoices from the potentials
  • Wiki-based Context-sensitive Help

     

    The key in “going enterprise” is no doubt the new security/permissioning scheme. That said, Zoho CRM has already been functionally rich even before today’s upgrade.  I’ve repeatedly stated that supporting business processes like Sales Order Management, Procurement, Inventory Management, Invoicing  Zoho really has a mini-ERP system, under the disguise of the CRM label.smile_wink.  In fact let’s just stop here for a minute. 

    Today’s announcement aside, I still consider Zoho’s primary focus to be the small business (SMB) market.  As for CRM, it really comes down to the classic breadth vs. depth of functionality question.   Zoho CRM’s breadth, along with the other productivity applications allows many SMB’s to use it as their single, only business application.  The market leader in SaaS CRM, Salesforce.com clearly supports fewer business processes, offering more depth in each – probably a better fit for larger enterprises which likely run several applications anyway.   This matrix provides an overview of Zoho CRM vs. Salesforce CRM Group and Professional Editions. (click on pic for detail)

     

    Having done a functional comparison, a quick look at pricing demonstrates why Zoho CEO Sridhar Vembu called Salesforce.com still very expensive:

     

    CRM Pricing Comparison - http://sheet.zoho.com 

     

    No wonder Larry Dignan at ZDNet declares “Zoho aims to poach Salesforce.com customers.”  But Larry (and Marc), you ain’t seen nothing yet… just wait till Zoho comes out with a Salesforce.com importer smile_tongue.   

    Clearly, Salesforce.com does keep a close eye on Zoho, otherwise why would they spend money on the Google Adword “Zoho CRM“?

     

    But again, reality check: Salesforce.com does own the Enterprise space.  For now.

    Finally, a word about integration.  After all, Zoho is known for their almost endless range of products, they should work together…  Currently Zoho Sheet, the spreadsheet application is fully integrated with CRM – most data can be edited either inside CRM or in the spreadsheet format that many business users are more familiar with.

    Zoho plans to integrate Writer, their word processor, Mail (still in private beta) as well as some of the business applications, namely recently released Invoice and People. When all that’s done, Zoho will have a more complete offering than two industry giants, Salesforce.com and Google together.   I can’t wait…

     

    (Disclaimer: I am an Advisor to Zoho. Take anything I say with a grain of salt.  In fact with a pound of salt.  Don’t believe a single word of mine about Zoho products: go ahead and check them out yourself).

     

    Related posts:  Zoho Blogs, CenterNetworks, VentureBeat, CNET News.com, Mashable!, Between the Lines, Web Worker Daily, Irregular Enterprise, InformationWeek,

     

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    SAP Marketing Community Virtual Meeting

    I’ve said before, software giant SAP is a company that “gets” social media. Heck, their Global Marketing group even has a VP focused on Social Media. He’s now running a rather unique experience on a grand scale: a virtual Marketing Community Meeting, with some 2000 SAP marketers worldwide, using a Unisfair virtual conference center.

    The prelude to the meeting already started with blogging activity, using Jive’s Clearspace community platform. I’m truly honored to have been invited as part of a select group of external bloggers to participate, along with:

    Now there’s only one thing missing: a link to the actual event site. I can’t link ( for now?), since it’s an internal, behind-the-firewall event. I hope Steve and team will eventually be able to review the material created here, and eventually release some (most?) of it to the general public. Not only because it represents intellectual value to share, but because it would be consistent with SAP striving to be an open, conversational company. smile_wink

    Update (6/4): This post is now #5 for the Google search SAP marketing. That’s insane. (but I don’t mind)