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Is Going Green Good Marketing?

I’ve received an email from European SaaS All-in-One SMB provider 24SevenOffice (wow, that’s a mouthful, basically NetSuite+Office for really small businesses, see my earlier coverage):

2008 must be the year when we all act against the serious environmental threat that the world is facing. 24SevenOffice has developed “The Go Green Game”, a Flash-game that puts focus on the pollution caused by the millions of unnecessary server rooms and servers located in all companies.

In addition, 24SevenOffice will plant trees based on the number of players, in co-operation with Nobel Peace Prize winner Maathai’s Green Belt Movement. If you wish to make a direct contribution to the society, let yourself entertain at http://game.24SevenOffice.com/ or forward this e-mail to friends, colleagues and business partners who are committed to the environmental battle.

Thank you for showing responsibility for the environment! The game can be found here: http://game.24SevenOffice.com/

I had mixed thoughts at first reading: Obviously environmental consciousness is becoming fashionable. Companies rush to launch their green initiatives in order to look “responsible corporate citizens”. OK, that’s the cynical view, but after all, these are often useful initiatives, and I’ve already said you don’t have to be purely altruistic to do good.

Whatever this game may be, it’s just a “save the earth” message, it’s not a vehicle to push 24SevenOffice products…

But wait! Like Columbo, when you think he’s gone, but comes back and drops the gist of the conversation, there’s a footnote here:

NB! The products mentioned in this e-mail are not the environmental sinners in themselves.
The environmental problem is based on the fact that most businesses, unnecessarily, have their own
servers and server rooms. This is the issue that 24SevenOffice is addressing.

Ahh…so it is advertising after all. Oh, well, it still delivers a correct message .. let’s check out the game itself:

I need to practice my swing, I could barely smash a few servers, look how much they’ve already racked up! Even worse, I’m not good in reading instructions, totally missed option#2, which is…no, I can’t tell you, it’s too violent.smile_devil

Joke apart, 24SevenOffice clearly has a point: maintaining millions of servers for (small) businesses is wasteful, switching to Cloud Computing allows central servers to be more efficiently utilized, we’re all saving energy.

As a side-note, I’ve just looked at a web-based service that allows us, as individual consumers “go green” – will report about it when they are ready.

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Zoho for BodyBuilders :-)

This is hilarious: my blog stats showed hits for the Google search “gaining muscle”.  It turns out that an older post titled Zoho Suite Gaining Muscle is on the first page of the Google results, amongst the real stuff for bodybuilders.

This is almost as funny as when an export/import trading company offered me link exchange, as my post titled How to Import All Your Archive Email Into Gmail came up second on Google for “how to import” smile_thinking

Update:  The combination of a little fun with the title and some Google juice can produce unexpected results.  I’m not sure Robert Scoble and Shel Israel wanted to be listed in this company. smile_omg

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Can the Software Sector be Resilient to Recession?

I was very lucky in the early 90’s being in an industry that was not only shielded from recession, in fact it was thriving.  Corporate America was taught to fight their way out of the slump by Business Process Reengineering, and what better way to execute it than by implementing new integrated business information systems.  The slump for the rest of the country was a major boom for SAP, and the entire ERP industry born in their footsteps.

Today we’re amidst another technology change, one that may just ensure relatively smooth sailing through a recession for the Software sector – at least those who are on the right side of the change.smile_wink  The belts will be tightened, says the New York Times, but technology will still grow, just at a slower rate:

Overall growth in technology spending may fall from 7 percent last year to 4 percent or less this year, according to estimates by IDC, a research firm.

But that won’t be nice 4% growth for the entire industry; I strongly believe pioneers of Software as a Service (SaaS) will be amongst coming out of a slow-down as winners, leaving others in the dust. 

TechCrunch is optimistic for the entire Web 2.0 business:

All of those Enterprise 2.0 startups out there, or even Amazon trying to sell Web-based computing infrastructure, are actually at an advantage. Customers are more likely to try cheap cloud computing when they can no longer afford the alternatives.

ZDNet’s Dan Farber disagrees:

Most of the Web/Enterprise 2.0 startups can’t get a hearing with CIOs and tech buyers at corporations. While consumer applications are influencing corporate applications and coming in through the back door, Enterprise 2.0 apps (blogs, wikis, predictions markets, social networking, mashups, collaborative cloud-based apps and technologies such as RSS and tags) are just beginning to reach the radar of larger corporations, and they are not considered mission critical, which is where the money is funneled first

I think they are both right – and wrong.  I don’t agree that the entire Web 2.0 sector is immune to a down-turn: the advertising market will shrink,  the “lets-grow-insanely-who-needs-a-business-model” types will suffer. As Software VC Will Price says:

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 also agree with Will, that a movie we’ve all seen will be playing again:

The last downturn saw the valley swing violently away from consumers to the enterprise – bastions of value, hard ROI, tangible value propositions, enterprise pain points and budgets, etc became the mainstay of investment decisions and the consumer, I kid you not, was literally a bad word…
The valley became all enterprise, all the time.

It will not be all, and not only Enterprise, but Business Software, whether for the Enterprise or small businesses will come back with a classic, “old-fashioned” business model of actually charging for value (product or service) delivered.  Of course there is still the dilemma of selling business software – much better if you don’t have to, it is getting bought instead. smile_shades  Yes, Dan is right, “Web/Enterprise 2.0 startups can’t get a hearing with CIOs and tech buyers at corporations” and their  apps are not considered mission critical, but the whole point is that a lot of these Enterprise 2.0 tools are not sold at the CIO level.

The after-bubble nuclear period of “no IT spending at all” found me at a startup. 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 … ramping up to $60-$100K annually.   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.

As Zoho CEO Sridhar Vembu adds to the discussion:

It is useful to remember that both Salesforce & WebEx thrived during the last recession – in fact they were relatively unknown during the last boom. Cost was a major part of the reason they thrived in the bust.

Indeed. Software as a Service and the typically associated pay-as-you-go model allows businesses – enterprise and SMB – to use software without the typical upfront investment the traditional model would require, therefore SaaS providers have a good chance of withering a Recession.  Another noteworthy idea in Sridhar’s response is that they really don’t have to have a “massive win”, a total move from the desktop to the cloud: a “marginal” business  is good enough.

Of course this “marginal business” is not as attractive to many startup entrepreneurs as fast forwarding to the IPO, preferably over $1.5B. In fact it’s really boring… building a business gradually; no IPO thrill; serving millions of customers, helping them actually conduct business.  Oh, and making millions of dollars of real revenue in the process – not bad, if you ask me.  And it’s quite bubble-proof. smile_wink

Related posts: Vinnie Mirchandani –  Why it will be very different this time, Fred Wilson- This Time Will Be Different.

Update (1/28): Forrester Research predicts gains for Enterprise Web 2.0 apps in 2008.   Also read: Between the Lines, ReadWriteWeb.

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Not All Presentation Managers Are Created Equal…

Sorry if this post feels a bit tongue-in-cheek. It is.  But I can’t help making the comparison when I see both Google and Zoho announcing new features of their Presentation Managers the same day.

We can’t stop adding features!  – announces the Google Docs Blog.  Today’s newbies are PDF support and adding vector shapes.  Some shapes.. the pic to the left shows the available inventory.

The pic below lists the shapes available in Zoho Show:

 

Add to the above hundreds of clipart items in Zoho Show, all of which, as well as the shapes can not only be moved and resized, like those in Google, but also flipped, rotated directly by dragging them.  And of course there’s Zoho’s theme gallery to jumpstart your presentation with… and a zillion more features.

Oh, well… draw your own conclusion.  Bias alert:smile_embaressed  I am an advisor to Zoho.  Don’t just take my word – go and play with Show yourself.

Related posts: Download Squad, Googlified , Google Operating System, Google Blogoscoped

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SmartTurn: Inventory & Warehouse Management SaaS-style

Here’s further proof that the Software as a Service (SaaS) model will not be limited to CRM and Accounting: SmartTurn, providers of the first On-Demand Inventory and Warehouse Management System (WMS) announced today its $5M Series A financing led by New Enterprise Associates (NEA) and Emergence Capital Partners.

I admit the announcement took me by surprise; I have not heard of the company before. A quick look at the Oakland address made me suspicious though, and yes, I was correct: this company is a spin-off of Navis, who are veterans of Warehouse Management systems, from the “old”, i.e. on-premise world. Old-world or not, the Navis team carries the SaaS DNA: a little-known fact is that their CEO, currently Chairman of SmartTurn John Dillon was CEO of Salesforce.com before Founder Marc Benioff took the reins back in 2001. The investors are not exactly new to SaaS either: Emergence Capital were early investors in Salesforce.com, and they specialize on SaaS and nothing else (I believe they are the first Valley VC firm to do so).

Warehouse Management is an awfully complex area (I know first hand, having lead SAP logistic projects in the 90s), so if SmartTurn is successful, it will truly be a validation of all aspects of “Enterprise Software” being eligible for the On-Demand model.

There are very few Enterprise SaaS players around, but SAP’s (SAP)new SaaS product, Business ByDesign for the SMB market and NetSuite (N) for small businesses are worth mentioning: they both offer complete, integrated systems, including Inventory and WMS. The opposite of the integrated systems is the best-of-breed approach, in which case one of the most difficult decisions in enterprise systems is where you draw your functional boundaries, and for companies implementing a multi-system scenario what functions are left in which systems, where to cut overlaps. Inventory Management is planning and accounting for your inventory levels; Warehouse Management is the extension of the concept down to physical locations (warehouses, buildings, down to bin levels). SmartTurn appears to support the Procurement and Order Fulfillment processes as well, which, from a logistics point of view are the inflows and outflows to/from your warehouse.

This is an area worth keeping an eye on and I expect to revisit it once I know more about the company and their customers.

On a lighter note… $5M to manage the inventory of major businesses vs. $50M to superpoke FaceBook users… am I the only one sensing imbalance here? smile_wink

Update: No, apparently I am not the only one… Will Price, Managing Partner at Hummer Winblad Venture Partners:

It way 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 think, however, the investor who leads a $4 on $4m Series A in a company with a differentiated technology and a direct tie to hard ROI will feel calm in the storm.

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Proof that Vista is Slooooow

No comment.smile_angry

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Morsels from the Crunchies, or Whatever Happened to Business Software?

Now that The Crunchies, the Internet Startup world’s equivalent of the Oscars are over, the winners announced, a lot of champagne consumed, let me go back to a few thoughts that have been on my mind throughout the whole show.

First of all, it was nice to see so many startups recognized, meet familiar faces again, and I join the chorus in thanking TechCrunch, ReadWriteWeb, VentureBeat and GigaOm for putting the show together. Special kudos to Om Malik for coming only three weeks after his heart attack.

Second, I can’t help but think that some of the categories were .. well, almost deterministic, leaving zero chance of winning for the “little guys” lumped together with a giant. Right out of the gate, the first category, Best gadget/device: iPhone, Kindle, Ooma, Pleo, Wii. C’mon, did anyone doubt for a minute the iPhone would win? Or look at the Best mobile startup, where the finalist were AdMob, Fring, Loopt, Shozu, Twitter. Oh, please, 3 relatively unknown names against Twitter, a mega-phenomenon… smile_sarcastic

The other thought I’ve been pondering ever since the show is whatever happened to business software? The Crunchies were yet another proof that “enterprise isn’t sexy“: this was all about consumer-glitz, with a few startups who cater to businesses. That said, at least there was an Enterprise startup category, and I was really glad to see my friends at Zoho win it. Although I wholeheartedly believe they deserve it, this was by far not a slam-dunk category, with Zoho and 37signals, which has a religious cult-like fan-base being the two chief contestants.

Perhaps the Zoho team felt a bit of extra satisfaction, given that 37signals originally questioned their viability, and called them copycats rather than innovators. Well, the innovation debate definitely ended a few weeks ago, when PC World picked Zoho’s Notebook as one of the 25 Most Innovative Products of the Year. While the Crunchies were clearly a popularity contest (with over 100,000 votes) PC World’s list was compiled by professionals. This list was notably full of gadgets, and the only other software products preceding Zoho were Google Gears and the Facebook API.

Back to the Crunchies, Enterprise category, 37signals and Zoho are diametric opposites in many ways: 37signals product philosophy is all about simplicity, “products that do just what you need and nothing you don’t” while Zoho believes in functional richness, and their customer service attitude is quite different, too. Yet I believe they are both good companies, and there’s a clear demand for their products, which is well proven by the hundreds of thousands of loyal customers. Neither of them are really Enterprise software companies though. 37signals caters for what they call the “Fortune 5,000,000” and Zoho clearly stated their mission to be the “IT for Small Business” – not that a subset of their portfolio, the Office Suite could not become Enterprise-ready, but for now it’s not their primary focus. And focused they are …

I think the Crunchies used the term Enterprise quite liberally – I would have called this category Business Software. Now, if the names IBM, HP, SAP, Citigroup, Boeing, BMW, Shell, McDonalds, Pfizer sound familiarsmile_wink, I’m sure you agree that the company who claims these and others customers is truly an Enterprise Software company. Yet Atlassian ended up in the International category, to their bad luck, as they got paired up with Netvibes. The two are apples and oranges. Atlassian is a very successful company, but the people who buy enterprise software are not the types who hang out at the Web 2.0 tech blogs or vote for the Crunchies; Atlassian stood no chance against Netvibes, with their tens of millions of individual users, all potential voters in this popularity contest.

What do three so different companies, Atlassian, 37signals and Zoho have in common? All three are bootstrapped, fast growing, financially successful and follow the “old-fashioned” business model of making good products and charging for it. I could not help but think of these guys while listen to the announcement of the Best Bootstrapped startup category, decided between FriendFeed, PoliticalBase, ProductWiki, Techmeme, UpNext. Or while listening to the panel discussion moderated by Dan Farber, where Matt Marshall expressed his astonishment how far the ad-based business model propelled us, and was wondering if advertising as the only business model would work in the downturn (no R-word!). If we had to pick the survivors of a potential downturn, these three companies are certainly safe candidates. The good old business model of charging for your product, which, incidentally, your customers love works wonders. smile_regular

Of course there was a lot more to the Crunchies, but it’s been all more then adequately covered, and I wanted to focus on business software now. But…well, I am a guy and guys love cars… so I have to mention the Cleantech category, won by Tesla, makers of this beautiful electric sports car. The only problem is, the car does not exist yet, release date has been pushed out repeatedly, the company had to go back for repeat funding, just fired a bunch of people, including the VP Manufacturing, Lead Engineer if the motor team… but hey, why not give them the Award and keep on dreaming (about the car). smile_embaressed

Update:  Apparently I am not the only one questioning the rationale of some category assignments at the Crunchies; read CenterNetworks on user-generated content.

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Dream Job for a Software Marketing VP @ Atlassian

Atlassian, a fast-growing, successful enterprise software company is looking for a VP of Marketing. I don’t normally broadcast job searches here, but am breaking that rule now for I believe this is a truly exceptional opportunity with a truly exceptional company. (Disclaimer: I have no business affiliation with Atlassian, but admit to being positively biased, as the company exemplifies a lot that I stand for.)

They are best known for two products: Jira, the issue tracking & software project management application was their first hit, putting the company on the fast growth track and establishing a loyal fan-base in the IT community.  Their existing reputation in the IT community certainly helped the second product, Confluence, the enterprise wiki gain traction: it is now equally popular in the IT and business community.  Wikis in general  have become more commonly known in the past two years; once a tiny market niche, today a growing field where new entrants pop up left and right, claiming to be best in this and that….  But numbers talk, and the verdict is clear: Confluence is the undisputed enterprise wiki market leader. 
Atlassian is not sitting on their laurels: in the past year they diversified, acquiring several companies and launching new products on their own.  Frankly, I lost track, but I believe  their portfolio currently includes 8 products, all part of an “IT toolkit”, with the exception of Confluence, which is seeing fast adoption amongst business users, too.  

The customer list is impressive: IBM, HP, SAP, Citigroup, Boeing, BMW, Shell, McDonalds, Pfizer … just about all the Fortune 1000, as well as non-profits, Universities, Government Agencies, totaling over 9000 customers worldwide. (The chart is a bit misleading: Atlassian’s fiscal year starts in June, and the FY08 bar shows the current figure only, excluding projections.)

How did they achieve this?  They must have an excellent sales force.  Wrong! Atlassian has no sales force at all.  They don’t sell: customers simply buy their products on their own.   I often talk about  the pull-model that’s replacing the traditional, expensive enterprise sales process (6-9 months, high touch, flights, meetings, wine-and-dining, entertaining, in the end often nuked by politicssmile_baringteeth) – but that’s typically in the context of Software as a Service, and in the SMB (small business) market.  Atlassian’s products are mostly on-premise (although they now have a hosted version of Confluence) and their primary market is the large Enterprise.  Yet they pulled off what amounts to a small miracle:  essentially took the download.com, tucows style model we all know as consumers, and ported it to the enterprise space. 

Of course having customers try-and-buy through the Internet is not as simple as firing your Sales team ( or not hiring one).  It’s not a matter of a decision: it’ s a consistently applied philosophy, that you have to implement in every aspect of your business.  The key components are:

  • lightweight software
    • well-defined function set, meets specific user need, small user groups can get started
    • ease of use (both easy to learn and easy to use)
    • well documented, well supported
  • transparency
    • features (what you’re getting, no surprises)
    • issues (Atlassian’s bug tracker is open to the public)
    • pricing (simple, upfront pricing, no fill-out-contact-form-wait-for-sales-to-call-back BS)
  • low price (“expensable, not approvable” – to quote a former competitor)

The “pull-model” means customers will need to find you- which is why Marketing is a critical function.  With Sales gone, Marketing becomes sales (actually, Atlassian’s CEO proudly says everyone is in Sales, especially Support).  So if you are a marketing superstar,  or know one, want to be part of a successful team, work for celebrities , you owe it to yourself to apply.

Atlassian is not only about business – it’s about people.  I know, old cliche.. but here it works.  The unique culture this team maintained throughout their super-growth even now that they have 130 people is a large part of their success.

So what is this culture like?  Tough. When he doesn’t make his numbers, Atlassian President Jeffrey Walker is forced to make up for it as ticket-scalper on the street. smile_omg OK, joke apart, this photo was shot last August, when the entire San Francisco office went to see a Giants game together. (Incidentally, just a day before Jeffrey became cancer dude). This wasn’t a rare occasion, either: both the San Francisco and the Sydney teams have a lot of fun together:  Cutlassian, Mission: Atlassian, theme-filled staff events, abound throughout the year.   Their new office  building in Sydney is right next to a pub (hint: when will you guys realize you’d be better off buying the entire pub?beer)  I wonder when the San Francisco office will move into a winery…  Perhaps you get the picture by now: Working for Atlassian isn’t just a job  – it’s a lifestyle.  But don’t for a minute think it’s a bunch of rowdy kids having fun only:  they bring in $30 million a year.  And if you don’t perform, this is what awaits you.

So that’s the magic formula: combine business success with a fun, team-focused culture and you’ve got the makings of the ultimate job.  (Are you still reading, or have you alerted your Marketing superstar friend yet?)

Now, if this is the ultimate job, there’s one question unanswered: How come it hasn’t been filled yet?  I wanted to hear the answer straight from the horse’s mouse so to speak, so I asked Atlassian President Jeffrey Walker, who responded below:

We were inundated with resumes, and found a few excellent capable candidates. Unfortunately, one of the growing pains of companies like ours is we were not quite ready for the right candidate. Incorporating someone of the caliber we need takes preparation. Our search began prematurely. Lesson learned. After the founders and I took another few ‘long walks’, we came out aligned and ready. This time I fully expect to complete the search. Just need the right remarkable individual.

Well, I did not walk with Jeffrey and the Founders, but I certainly hope they will not change a lot:smile_wink.  I have a lot to say on the subject of hiring, but it’s not specific to Atlassian, so I’ll break it out to a separate post.  In the meantime, if you are that “remarkable individual”, what are you waiting for?

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LinkedIn Outage

This may very well be the first LinkedIn outage I’ve caught, and it comes on the day Google’s Blogger was down, and the Technorati Monster popped up it ugly head again.  Oh, well, at least this one is cute.