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Ellison’s Double Dip: a Conflict of Interest? No.

Posted on March 30, 2006 ·

Netsuite LogoMatt Marshall at SiliconBeat is wondering whether Oracle CEO Larry Ellisons 60% ownership (*) in NetSuite, preparing for a $2B IPO represents a conflict of interest.

I don’t think so.  Oracle dipped into the On-Demand market before,  it did not quite work, so Ellison decided to tackle it differently, through his investments.  He is a Warlord battling in different theaters and maintaining two separate, not directly interchangeable armies.   This is still true, even though Oracle’s second attempt in the SaaS space will likely be successful, especially after absorbing Siebel.

The issue isn’t so much On-Premise vs. On-Demand anymore,  but the market segment they go after: NetSuite is still mostly an SMB player, although more the “M” than the “S” piece.   The SMB market requires a totally different Sales and Marketing approach, amongst others, and Oracle with it’s current “legacy” salesforce can’t reach this market profitably.  It’s the Business Model, not only the technology, that requires a separate “army”.

For the above reasons I’ve long been advocating that SAP also should invest in it’s own NetSuite-equivalent (or better, and I happen to know who ) to tackle the SMB market.

Back to the Ellison factor, Jason  still contends that “NetSuite could get scooped up by Oracle before it ever sees the light of the public markets.”

* (I think it’s actually less than 60%, but more than 50% – but that’s irrelevant here.)

Update (4/2):  Vinnie agrees: “I have always believed if Larry had invested in every one of Oracle’s alums, he would be a far richer man than Bill Gates…. Maybe Larry should similarly invest in Open Source, Third Party

Maintenance, BPO, Search, Web services start-ups. They represent the

growth and the innovation in the market, not the company he founded.”

Sramana Mitra‘s post is also worth reading.

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Filed Under: Business, Enterprise Software, ERP / CRM, SaaS, SMB / SME, Software ·
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Software 2006

Posted on March 30, 2006 ·

I’ll be attending “The must-attend software event of the year”, Software 2006, organized by the Sand Hill Group.

The 2,500 participants meet industry leaders on April 4-5th in Santa Clara, CA.

I hope to blog from there, although it’s more likely that I only get to do it after the event.  I also hope to meet many of my readers.  If you’ll be there and would like to meet, drop me a note.  

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Filed Under: Bay Area, Business, Collaboration, Enterprise Software, ERP / CRM, Marketing / PR, Open Source, SaaS, Social Networking, Software ·
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Open Source kills innovation (?)

Posted on March 29, 2006 ·

Does Open Source really kill innovation? – debates Michael at SQLFusion, quoting from the Economist, Harvard, Infoworld and others.   It’s worth reading – and considering that they are the company soon launching Open Source Fusion, you can guess what Michael’s answer is.
Full post here.

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Filed Under: Business, Enterprise Software, Open Source, SaaS, Software ·
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MyOraclr

Posted on March 17, 2006 ·

This is cute: The Oracle FAQ site OraFAQ runs on… MySQL! (via Zack Urlocker).  Oh, the “r” in the title?  That’s just for 2.0 compatibility.

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Filed Under: Enterprise Software, Humor, Open Source, Software ·
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SaaS vs. Open Source for SMB’s? A No-Brainer.

Posted on March 5, 2006 ·

(Update)
I have to take issue with Paul Gillin’s approach as he discusses whether SMB’s are better off with SaaS or Open Source Applications. If we equate Open Source to downloadable, on-premise installed software, I have no doubt, and have stated it before that the only good answer is SaaS. But, hold on, a few minutes later we’ll see these two options may not be mutually exclusive for long.

Paul analyzes several criteria:

  • cost
  • speed of deployment
  • customization
  • reliability
  • data ownership
  • vendor viability

These are all issues well-discussed on the web, and although Paul does not explicitly say, my reading is that he also leans towards the SaaS conclusion. The problem is that this criteria-by-criteria approach works well with a typical (mid-size) company where some level of IT expertise is present. Small Business America is very different from the web-savy geeky software startups; the majority are more traditional businesses with no CIO, IT department, in fact often without any IT support whatsoever. While the two main obstacles SMB’s face with any on-premise implementation are cost and (lack of) IT expertise, you can’t just translate the latter into cost – i.e. the cost of hiring full-time IT support. The opportunity cost of Management venturing into IT hiring and project decisions instead of focusing on their primary business makes this an impractical approach, leaving us with only one choice: SaaS.

Another issue not discussed in the article is integration. Open Source or SaaS, getting several packages work together requires IT and business process expertise, which typically means hiring expensive consultants. Therefore, I would go one step further: not only SaaS is the best choice for most SMB’s but they should seek to minimize the number of providers, i.e. the best choice is to use integrated All-In-One solutions.

The current undisputed leader in this field is NetSuite, but as they follow Salesforce.com’s footsteps and move upstream chasing midsize businesses, they leave an opening for up-and-coming challenger 24SevenOffice, which focuses solely on SMB’s, and covers a wider range of business functionality than the incumbent.

This is the situation today. Now, let’s revisit the original question: SaaS or Open Source? A tiny startup named SQLFusion is working on making that question obsolete. The dilemma with Open Source: a lot of good applications are available, but they are written by geeks for geeks… you really have to be quite knowledgeable to download and implement them. Example: at one of the startups I am advising I use SugarCRM over the internet. Starting to use it was a no-brainer, but when I looked at the prerequisites and the process of installing it myself, my head started spinning. No way, this is not for me! Open Source Fusion, which I hear is within days of opening for a limited beta will bridge the gap between availability and usability of Open Source Programs, by offering such apps to be used over the Internet. In true On-Demand fashion, maintenance, upgrades all happen in the background, one can start using the programs without implementing them. So it will no longer be SaaS or Open Source, but SaaS and Open Source.

The first incarnation of Open Source Fusion will provide access to individual applications, still leaving the integration dilemma for SMB’s, but the technology under the hood enables the company to later offer an integration layer between the key applications it serves up.

So the future is Open Source Software as a Service. Hm, here’s an ugly acronym: OSSaaS (?)

Update (3/6). Releated posts:

Update (5/23): Stefan over at The Small Business Blog discusses the issue; his company, WinWeb is expected to offer Open Source apps as a service soon.


Filed Under: Enterprise Software, ERP / CRM, Open Source, SaaS, SMB / SME, Software, Startups · Tagged: , , , , , , , , , , , , ,
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Wikis are the Instant Intranet

Posted on March 4, 2006 ·

(Updated)

Since I received a few questions after my post: 43 Wiki Prank and the Whiteboard Test, I though I should add a bit of clarification. The underlying thought in that article was to pick the right tool for the right situation, and the whiteboard-test is just one trick to differentiate when Wiki’s are helpful vs. Forum, Blog ..etc software. It’s by far not the only situation when a wiki is invaluable.

Another example is setting up a living, breathing Intranet, one that people can actually use. Anybody who works in large corporations probably thinks of the IntraNet as a one-way communication channel for Management to talk (down) to employees. Getting your own content in? Forget it! Even when I was VP in a mid-sized organization and did not have wait for approval, I still had to talk to the IT Director, wait for him to fit it in his team’s schedule, then tell him what was wrong when my content finally showed up.

It does not have to be this way! Companies “own” (well, at least part of the day) the intellectual capacity of their employees, so why not put it to work? Even in the large corporate environment a wiki can be a lively collaborative addition to the Intranet (see the wiki effect by Ross), but for smaller, nimble, less hierarchical business a wiki is The Intranet.

At a much smaller organization I wanted to introduce a wiki for collaboration, for all the reasons explained in the video below. The company was a bit more old-fashioned, not exactly the early-adopter type. I expected some resistance against something with a geeky-funny name like wiki… so I simply announced we’ll be creating an editable Intranet. People started to use it from day 1, and few cared that the thingie behind is called a wiki.

David Terrar describes a somewhat similar story here.

Finally, the excellent video by JotSpot Founder Joe Kraus.

Other related posts:

Update (4/9): A really good guide to wikis by David Terrar.

Update (10/22): Here’s a case study of Confluence, the leading enterprise wiki being used as the ExtraNet.

Update (4/9/07): Read/WriteWeb on The Age of Instant Intranets.

Update (9/20/08):  A Funny Thing Happened on the Way to the Intranet

Filed Under: Collaboration, Enterprise Software, Open Source, Personal Productivity, SMB / SME, Social Networking, Software · Tagged: , , , , , , , , ,
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Web 2.0 & Enterprise, Round 3: Enterprise Software for Small Businesses

Posted on February 22, 2006 ·

(Updated)

This post is a continuation of Web 2.0 in the Enterprise – Round 2 in which I reflected on some thoughts brought up by Stephen Bryant in Five Reasons Web 2.0 and Enterprises Don’t Mix.

The Web 2.0 in the Enterprise TIE event I previously referred to was hectic, trying to cover way too many subjects in 90 minutes, with one common underlying assumption: Enterprise means large corporations. The theme of the night was how these Web 2.0 technologies and business/communication approaches will “seep in” to the large enterprise from the bottom up.
What is then Enterprise Software? Typically SAP, Oracle et al come to mind, and I can hear the roar “Enterprise Software is Dead” – well, is it?
If we define Enterprise Software as the traditional heavyweight, expensive, pay-huge-license-fees-upfront, then try-to-implement-forever model it is certainly challenged from two ends, by Open Source and the SaaS model. But there is another definition that is largely being overlooked:
Software that allows a company to conduct it’s everyday business, supporting most of the core, fairly standard business processes any company performs repeatedly.

With this definition, Enterprise Software has a whole new, largely unpenetrated market to enter: that of small businesses, referred to as the SMB or SME segment. Such enterprise functionality has traditionally been beyond reach for a typical small business, for two major reasons:

  • Cost (license, hardware, implementation, maintenance ..etc)
  • Lack of IT resources (integrating applications, designing processes, dealing with multiple vendors ..etc)

SaaS is the right answer for both, since it allows the SMB user to start using the functionality without an upfront investment, does not require implementation, upgrades, maintenance, worrying about backups and security ..etc.

Of course several Open Source packages are available completely free, which is a perfect solution for the cost problem, but I think most of these packages are by geeks for geeks; i.e. you really have to be quite IT-savy to implement, integrate, upgrade them, and as we stated most small businesses simply do not have that type of resource. Yes, that means the Silicon Valley tech-startups are not a true representation of the SMB world
Likewise, I don’t believe SOA, best-of-breed packages working together are an option for the SMB market, for the same reason. They will play an increasingly critical role in larger enterprises with a professional IT organization, but for a few more years SMB’s are far better off with integrated, All-In-One type On-Demand solutions.

Of the Web 2.0 companies Stephen mentions in Five Reasons Web 2.0 and Enterprises Don’t Mix two are offering Integrated On-Demand solutions:

  • NetSuite
    Stephen lists NetSuite along with Salesforce.com, and while they are in the same club, the significant difference is that Salesforce.com is only CRM, while NetSuite offers an integrated CRM+ERP package. They both are trying to become a “platform” via NetFlex and AppExchange, respectively. Both companies are definitely pushing upstream, going after the Enterprise market as in the first definition, i.e. large (or midsize) corporate customers.
  • 24SevenOffice
    Coming from Europe this company is lesser known. They focus on the SMB market and offer a modular but integrated system with a breath of functionality I simply haven’t seen elsewhere: Accounting, CRM (Contacts, Lead Mgt, SFA), ERP (Supply Chain, Orders, Products), Communication, Group Scheduling, HR, Project Management, Publishing, Intranet. Essentially a NetSuite+Communication, Collaboration. I’ve taken their test-drive (currently IE only) and liked it. I would debate how they structure their menu-system, as functions like Product, Inventory, SCM are all hidden under Financials.

Back to the economics: if SMB’s could not in the past afford Enterprise Software, the same held true for the Software Industry: they could not afford SMB’s, since there was just no way to make the numbers work. The cost of customer acquisition vs. the very low license fees made it an uneconomical model, whether via direct or channel sales.
Once again, technology comes to the rescue: the Internet, and largely Search Engine Marketing changes everything. Joe Kraus, Founder of JotSpot and previously Excite sums it up:
“ Ten years ago to reach the market, we had to do expensive distribution deals. We advertised on television and radio and print. We spent a crap-load of money. There’s an old adage in television advertising “I know half my money is wasted. Trouble is, I don’t know what half”. That was us. It’s an obvious statement to say that search engine marketing changes everything. But the real revolution is the ability to affordably reach small markets. You can know what works and what doesn’t. And, search not only allows niche marketing, it’s global popularity allows mass marketing as well (if you can buy enough keywords). “

Another benefit of SEM is that while traditional advertising can pick the right demographic groups, it cannot pick the right time, only a fraction of the target audience is in “change mode”, looking for a solution. That’s the beauty of Search Engine Marketing: obviously if you are searching, you have a problem and are looking for a solution, which is half a win from the vendor’s point of view.
Small Business Trends recently published a survey on “Selling to Small Businesses”, which supports the increasing importance of SEM: “A full 73% of vendors attract small business customers through search engine results”

Finally a quote from Ziff Davis again: “Products for the long tail and SMB market, where 72 million businesses spend $5k or less each year, are a much easier play” Wow, I don’t know where those numbers come from, but if I were a SMB-focused software vendor, I’d certainly like them … there’s a goldmine out there.

Update (2/22): Perfect timing for this report to come out just now: U.S. SMBs to Spend $2.2 Billion on Software in 2006, Says AMI-Partners

Update (4/17): Interprise Suite (recently debuted at Demo 2006) claims to be “The FIRST Accounting / ERP / CRM Solution to Bring the Power of the Internet to Small and Mid-sized Business“. While I take issue withe the claim to be “first”, considering the breadth of functionality it’s definitely an option to consider for SMB’s .

Related posts:


Filed Under: Business, Enterprise Software, ERP / CRM, Marketing / PR, SaaS, SMB / SME, Software · Tagged: , , , , , , , , , , , , , , , , , , , , , , , ,
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Web 2.0 in the Enterprise – Round 2

Posted on February 22, 2006 ·

Stephen Bryant lists Five Reasons Web 2.0 and Enterprises Don’t Mix (hat tip: Espen Antonsen).  He cites his personal experience of having worked in an innovative small software company that could not close deals with the slow enterprise behemoths. “What we needed was a shorter sales cycle, a very, very big salesforce, or some combination of the two”

One of the key changes we’re experiencing today is that the traditional big salesforce becomes obsolete. 

  • At the recent Web2.0 In the Enterprise event (references here, here, and here)  Ross Mayfield, CEO of Socialtext described his bottom-up grassroots approach: first a small team, typically a department, or an ad-hoc project team starts using the hosted wiki … then some other teams within the same organization … eventually Ross walks in to close a corporate level deal, but by the time it’s a fait accompli.  (more in the Wiki Effect).
  • Jeff Nolan of SAP related his experience after making an investment in Socialtext, and bringing the wiki “officially” in-house: he received dozens of emails from SAP-employees who had long been using the hosted version for their own project, just had not told anyone ,since it was “unofficial”.
  • One of Ross’s competitors, Joe Kraus of JotSpot said: “for the bottom-up effect to work, the price has to be expensable, not approvable”
  • Of course you could argue the above approach will only be feasible with communication / team collaboration tools, not with Enterprise packages that require the whole company to be on the same platform.  Well, it depends.. as Sales VP in a smaller (30 employee, $5M) company I found myself in a situation where not only my team needed a CRM solution, but the whole company needed some IT modernization. For budgetary and resistance reasons we decided the sales team will march ahead on its own, but we implemented NetSuite, laying the foundation for the rest of the company to join us on one integrated system.
  • Finally, a quote from SugarCRM’s John Roberts: “Software is bought, not sold.”  Nice punchline, not a 100% true, just like the “No Software” tagline from the other guy… but delivers the message: sales is replaced by demand generation, becomes a pull– vs. a push-process.

Next I will talk about how Enterprise Software “comes down” to the SMB sector – but for the sake of readability, it  is in the next post.

P.S. Stephen, perhaps one day we’ll hear about the pig-killing job in Tuscany

Update (2/23):  The Doctrine of Slow and Old: Big Business and New Applications 
Update (2/25):  Giving enterprise software practices an ‘angioplasty’   

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Filed Under: Collaboration, Enterprise Software, ERP / CRM, Open Source, SaaS, SMB / SME, Social Networking, Software, Startups ·
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Web 2.0 in the Enterprise – Blogging the TIE Event

Posted on February 17, 2006 ·

The Web 2.0 in the Enterprise panel discussion hosted by TIE was exciting.  In fact it wasn’t really a panel discussion, rather a most interactive group event.   Jeff Clavier as moderator with Charlene Li, Ross Mayfield, Jeff Nolan as  panelists quickly threw away the traditonal “moderated discussion followed by Q&A” format (that’s-so-web-1.0), and turned it into a vibrant, lively, interactive, “Web 2.0-style” conversation.

In fact the conversation was hectic enough that I’ll do this in a reverse order: first attempt to organize some of my thoughts, then just publish my rather raw notes. 

Key thoughts:

Far too broad subject.  Lots of different interpretations:  A technology?  Marketing label? Software delivery method?  New functionality?  Business Model? Human interaction, collaboration? ..etc.  As Jeff put it the day after in his blog: “It’s pretty hard to focus on the concept of mashups when you are also introducing blogs/wikis, or talk about the signifigance of scripting and hosted software delivery at the same time. “

Conclusions from the Panel:

  • Web 2.0 is people, collaboration, creating together.
  • Business Model change is more important than technology change.
  • The divider between consumer and enterprise software will blur.
  • Give up control, gain value.
  • Start small, grow bottom up. 
  • The question is not what new programs can do for us, but now that we’re enabled, what do we do together, better.

Now, my unedited, raw notes:

Intro Round:

  • Jeff Clavier
    Define Web 2.0:
    • Rich, easy-to-use user experience
    • Architecture for participation
    • Vertical Apps, mash-ups
Why these panelists:
    • Friends
    • Bloggers
    • Been living/doing Web 2.0 before they knew it
  • Jeff Nolan
    Expanding on definition:
    • Rich user interface.  Late 90’s move from client/server to Web-> gained access, lost usability (of interface)
    • AJAX. Scriptable client. Key is that developers use same tools that users can now have to extend functionality
    • Realization of SOA.
Having two different technologies for consumer and enterprise is nonsense. Web 2.0 technology started with consumers, as it matures, the line between the two will blur.
How do companies develop software: community concept.  Interesting example for partner effort: salesforce.com’s AppExchange . 

  • Charlene Li
    • Web 1.0: control was in center, by institutions
    • Web 2.0; small companies, few resources, power pushed to end-users.
Don’t need huge sharepoint installations, just use a wiki.
Business managers like it, IT fears it.  Ning ; do-it-yourself mentality.   Social Computing – Forrester report, being circulated, not exactly just to Forrester Clients (but that would be sooo 1.0!)

  • Ross Mayfield
    Introduces himself as “ross dot typepad dot com”  (but that’s only natural for someone who employs guys with names like Ingy döt Net  )
Socialtext:

  • part open source
  • hosted system
  • appliance

Web 2.0 is People.  Ajax is a cleaning detergent. 🙂   Real change: how we sell software: bottom up.
Ad-hoc groups forming standards, foresaking institutions, e.g. mashup camp .
Evolution:

  • Mainframe: power to the Enterprise
  • PC: tool for individuals, personal empowerment. Create individually-> deliver, share.
  • Web 2.0: Create together

KM   failed us:  fill form -> contribute knowledge ->  some system magic processes, shares.  Now people have the tools, the social interaction and provide knowledge together.
You let go of control, get back value.

Q&A:

Q: Where is Web 2.0 in the enterprise today? Enterprise world living in the past.
Ross: It exists in email. Email is broken .  Occupational spam (CC; BCC).

Q: Can SAP, Oracle …etc absorb Web 2.0 ideas or will new companies emerge and displace them?
Jeff Nolan: History is against us, few companies make the transition.  But rules exist to break them 🙂  Today’s vendors invest hugely in technology. Story by Shai Agassi : CTO of Prcoter & Gamble told him if the SAP system goes down for 4 hours, it takes out the quarterly profit. 
Oracle is buying its own LAMP stack. They can only beat SAP by changing the game : removing licence revenue entirely… of course this is speculation only.  One could argue that Oracle and SAP are already in the subscription business: maintenance revenue.
Charlene: Microsoft is pulling pieces of Web 2.0 into Sharepoint.

Jeff Clavier: Enterprise tactic: as soon as there is a noted leader, they will make a move: acquisition.
Jeff Nolan: Sales is what’s broken, not the technology. Example: after SAP’s investment in Socialtext he receiveed dozens of emails from various groups inside SAP, who had already been using the hosted wiki,  just  hadn’t told anyone.

Q: VC’s don’t want to invest in Enterprise software …
Ross: Cycles back and forth.  Problem is the business model: 50-60% of cost is sales.  They have too much legacy in place.  Moore’s law does not matter. The disruption to watch for is not in the technology, but in the business model.  
Cost of personal publishing trends towards 0, cost of forming groups trends towards 0. Simplicity key for user experience.
Jeff Nolan: “lots of rounded boxes”
Ross: Wikipedia – no other software that gets a group of strangers together so effectively

Jeff Clavier to Charlene:  What will it take for IT to embrace web 2.0? 
Charlene: They ask: “How do I stop it?”

Q. (actually a remark) from an Ernst & Young Consultant: his Client is using Socialtext to document SOX compliance procedures.
Ross: Stages of penetrating a large Client:

  • small group using hosted system
  • IT starts having security concerns
  • get the appliance behind the firewall
  • CIO gets interested – > global use

Quote from Clay Shirky : Process is an embedded reaction to prior stupidity .
Clarification: transactions stay in SAP. We’re a conversation backbone, not a transaction backbone.

Q: Somewhat longwinded question, basically questioning the “Appliance” model, and outsourcing in general: “wholesale outsourcing is far-fetched”.
Ross: Appliance: it’s just a different way of SaaS, a matter of network topology.
Counter-example to the hosting Q:  One of the world’s top 10 companies want ALL their applications hosted.
Jeff Clavier: Look at some of the huge salesforce.com implementations.

Q: How will all Web 2.0 solutions work together? – e.g. put some Basecamp functionality into Wikipedia?  What’s the future role of a CIO?
Ross: Dresdner Kleinwort Wasserstein, a huge investment bank appointed an Exec just to oversee usability testing, make sure all systems fit together.
CIO’s in the future will not only be concerned with driving down cost, but instead with driving innovation. They can go back to thinking more strategically.

Q: Flickr… etc are in the consumer space, Socialtext is a tool. What are the emerging applications for the Enterprise?
Q: Collaboration, but inside a “walled garden” is not Web 2.0, is it?
Jeff Nolan:  Brings example of blogging inside SAP,  IT was stonewalling, so he went ahead, bought a bunch of licences and started it himself.  But now he starts seeing “entrepreneurial” opportunities inside the corporation: if there is a large enough blogging community, he could start using Adsense inside. Basically it’s not about creating new applications, but discovering new opportunities.
Charlene: It’s not about tools, it’s about people, collaboration.

Q: How do I use my “old” transactional data in a wiki-type environment?
Jeff Clavier: Integration layers, RSS ..etc.
Charlene: RSS Transport, open formats…   Business managers can pick data, make his/her own “application”.
Q: (more a remark): Microformats: great, but not enough standards agreed upon.
Charlene: Give it a little time …

Q: Haven’t heard what problem Web 2.0 solves.. other than being a gateway to VC’s 🙂  What will it change?
Jeff Nolan: There is this mistaken expectation that whoever is doing Web 2.0 will do something new, change things.  It’s not “Web 2.0” , it’s YOU.
Ross: Do you interact socially online differently than before?  (yes, and a lot of commotion  from the audience).  There you go …
Q: (actually a remark) from the audience, that  sums up the essence of the night: “We just did  Web 2.0 here, getting an answer from the panel would have been Web 1.0, now you got 25 answers from all of us, that’s 2.0″ 🙂
Ross: Fostering of transparency will change management principles. 
Kids are doing homework on MySpace.
Jeff Nolan: Craigslist+Google Maps mashup: a third person brought it together, it was not initiated by Craigslist, not by Google.

Jeff Nolan: There are about 1500 major business processes in any company, of which 20 impact revenue.
Ross: Process going away.
Jeff Nolan: Disagrees.  (actually me, too .. or I am in between … but that belongs to another post)

Jeff Nolan: Value of IP is not in code, but in community -> Open Source.
Charlene: Enterprise has identity, authentication, reputation system, which does not exist out in the open – i.e. consumer space.
Ross: Build Wikipedia inside a corporation, a.k.a “SAPedia ”  Goes on explaining how Socialtext can give away a good deal of its software and get paid for related service.

Q: Will the Web be able to handle the incerased traffic?
Ross: On issue of Attention: I don’t have to read the New York Times, I have trusted friends who will refer to what’s interesting… point is, use feeds, subsrcibe selectively, use the “unsubscribe” button.

Q: On small businesses adopting blogs for marketing, for customer acquisition
Charlene:  SMB:  Office Live, Basecamp..etc  > not apps, but platforms.  Hosted Services.    (this is where I left the room for 5 minutes, if anyone has notes, pls, contribute…)
Jeff Nolan: We may think of a stripped-down giveaway version of CRM, supported by advertising. In fact, we could by our own ad network.

Q: (more a remark): Companies are run like command economies . Technology empowers workers to be more entrepreneurial.
Charlene: Mindsets will change. Enterprises need to start small, bottom-up.
Jeff Nolan: Quotes a story from SAP, when one of his employees new to blogging sent him a draft blog post for approval. “No, I don’t want to approve, just post it”

Q: We talked about enterprises adapting to new Web 2.0 technology. How about existing “old” products?  Is the current IT infrastructure a bottleneck?
Charlene: Everybody is using a browser, there is a lot of information in those sessison that we don’t know about, don’t share.
Ross: Just do it in a socially acceptable manner.

Q: Will viruses come to Web 2.0? What standards will safeguard community?
Charlene: Pollution comes with social interaction.
Jeff Clavier: Splogs: companies work together fighting it, in a collaborative way, not alone.
Ross: Blogs are individually owned-> individual policies for fighting spam.
Wikipedia is figthing spam not using some feature, but through human intervention, collectively.
Digg is another example for collective filtering.
Charlene: Comment-based reputation systems don’t work.  Pulling identiy info from various systems through API’s better.
Jeff Nolan: Microsoft gave up the Passport concept when they realized it won’t work.

Q: For time critical info, e.g. in Customer Support, how can Web 2.0 help?
Ross: There should not be escalation, the system should be better organized, i.e. wiki for Help Desk: make it available to more people, not jus the Help group.  A group of people have to agree on how to use it.

Q: (from a consultant): Web 1.0 made a lot of people rich.  Where is the money, what are VC’s investing in.. what should I start tomorrow?  (huge laughter in audience)
Charlene: VC’s keep on asking me the same. If I knew the answer, I would not be here 🙂
Concern: they all chase the consumer Internet… should look towards the Enterprise.
Jeff Nolan: Joshua Schachter , founder of del.icio.us is a good example, he was thinking more  like an investor than a founder … keen on building something he can scale up.
Ross: Entrepreneurism is just experimenting. Start small, use open source, build, test.  Company, business model, $$$ comes later. 
SugarCRM as example of disruptive business model
Jeff Clavier: Companies that are successful are all built around large communities.
Don’t try to be 10% better than and existing one, do something new.
Charlene: Nobody is providing Social Networking for companies. (debated by some in the audience)
Platforms are big, see NING.
Ross: NO! Start with an application, which becomes succesful -> then convert it into a platform

There was an endless stream of questions, the host had to cut it, due to time constraints.

 

It was a lively, intense discussion, special thanks to Prashant Shah , TiE SV Charter Member.  I am told the video will be available in about a week.

Update (2/17): Other Blogs on this event:


Update (4/10):  Jeff will moderate another session on the subject at IBDNetwork.

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Filed Under: Blogging, Business, Collaboration, Enterprise Software, SaaS, Software, Startups, Technology ·
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Salesforceless.com

Posted on December 21, 2005 ·

(updated)
Little did Jeff Clavier or Brad Feld know just how timely their posts on “Shared Nothing Architecture” would become in days now that the granddaddy of all on-demand software, Salesforce.com was partially knocked out for almost a day.

The Typepad outage that prompted Brad and Jeff write their piece was just storm in a teacup; this is the real thing, the Perfect Storm. Real business customers could not conduct their business for a day. That something like this would happen was inevitable, but didnt’ we all expect it in the form of a major Internet outage? After all, on-demand vendors are likely to do everything in their power to avoid such outages – or do they? In the case of Salesforce.com, the answer is probably a yes: Earlier this year, Salesforce.com announced it would spend US$50 million to set up redundant East Coast and West Coast data centers with rapid data replication and failover capabilities, an initiative it dubbed “MirrorForce.” (source: IDG).
That’s exactly the kind of commitment Brad and Jeff are asking for, and not all (smaller) providers can afford it. Not that they all should… their core competency being in developing innvative software, not running data centers, which should be outsourced to the “pros” like Vinnie Mirchandani pointed it out numerous times.

Back to our “Perfect Storm”, it will have an effect on the entire on-demand industry, since Salesforce.com is such an icon for this segment. SAP, Oracle etc… will no doubt refer to this “vulnerability” in their sales pitches. Rival NetSuite will not brag about it on their homepage, but their salesforce will likely be trained to point out to prospects why this could never happen to them …

What exactly happened is still unknown – which in itself is quite a customer communications fiasco on Salesforce.com’s part. I bet it will soon be fixed though: the company will come forward with an explanation of what happened, what they do to avoid it in the future, and what they do to accomodate their customers who suffered from the outage. My bet is on Marc Benioff – he will somehow manage to turn this fiasco into a PR victory.

Talk about communication, I am amazed the blogosphere is not abuzz with this story – in fact it’s hardly being mentioned, in sharp contrast to the recent Typepad outage. Isn’t this the type of imbalance Chris Selland and Brad Feld just complained about? Or is everyone out Christmas shopping? 🙂 Ohh… stores close soon .. gotta run now:-)

P.S. Salesforceless.com is a valid site – I just bought it. (not that I know what to do with it… )

Happy Holidays!

Update (12/21): Others on the subject:

Update (12/23): Unlike Salesforce(less).com, TechCrunch is not mission critical software, just an extremely popular blog, yet when they have an outage, Mike finds it important enough to go public right-away. Way to go!

Update (12/31): Reuters talks about Web Services outages, citing Typepad, del.icio.us … etc, not even mentioning Salesforce(less).com. Funny… Nice-to-have services appear to be more important than mission critical business applications?


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