SaaS and the Shifting Software Business Model

Barely two years ago we debated whether little-known Zoho was worth paying attention to. The majority view was that their Office applications were weak contenders that would never challenge the Microsoft suite’s position. I think I was in the minority stating that I really did not need more than 10-20% of Word or Excel’s functionality, but online-anywhere access and collaboration made the switch worthwhile.

Today Robert Scoble reports he is seeing online applications wherever he turns:

Today I’d say the skill set is shifting once again. This time to something like Zoho Writer or Google’s Docs. Because if you visit Fast Company’s offices in New York, for instance, they want to work with you on your copy in live time. Fast Fast Fast is the word of the day. It’s in our title, after all. Now some people still use Word, but last time I was there one of the editors told me he was moving everything over to Google’s Docs because it let him work with his authors much more effectively.

These are no longer yesterday’s wannabe applications. Zoho Sheet recently added Macro and Pivot Table support , going way beyond the average user’s needs (and certainly exceeding my spreadsheet skills, which are stuck somewhere at the Lotus 1-2-3 level). Zoho Writer today added an equation editor and LaTex support. Heck, I don’t even know latex from silicone, what is it doing in my editor? smile_wink
As I found out it’s important for Zoho’s academic and student users, once again, going way beyond an average user’s needs. (the other update today is mass import from Google Docs: nice, special delivery for Dennis, but I still would like to see a list of all my online docs, be it Zoho or Google, open them, edit them, and save to whichever format (and storage) I want to.)

Online applications have arrived, they’ve become feature-rich, powerful, and are the way software will be consumed in the future. They also change the business landscape.

Software margins choked by the cloud? – asks Matt Assay at CNet, pointing out a shift in Microsoft’s tone about cloud computing, recognizing that in the future they will host apps for a majority of their customers, and that their margins will seriously decline:

There’s not a chance in Hades that Microsoft will be able to charge more for its cloud-based offerings–not when its competitors are using the cloud to pummel its desktop and server-based offerings. This is something that Microsoft (and everyone else) is simply going to have to get used to. The go-go days of outrageous software margins are over. Done.

Matt cites Nick Carr who in turn recently discussed

…the different economics of providing software as a Web service and the aggressive pricing strategies of cloud pioneers like Google, Zoho, and Amazon.

This is fellow Enterprise Irregular Larry Dignan’s key take-away from the Bill & Steve show, too:

Microsoft CEO Steve Ballmer acknowledged the fact that a lot of computing is happening in the browser and not in applications. He also said that the future of software will have “a much more balanced computational model” and that Microsoft will have to compromise.

Of course it isn’t just Office. The obvious business application is CRM, where pioneered the concept and delivered the first On-demand product. But now a funny thing is happening: the pioneer is increasingly being replaced by more inexpensive competitors, including my Client, Zoho. Yes, SaaS disrupts the traditional software market, but there’s another equally important trend happening: the commoditization of software.

Commoditization is beneficial to customers, but a death-spiral to (most) vendors. Except for the few that drive commoditization. Zoho makes no secret of doing exactly that.

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Web Forms Gain Popularity

Web forms are increasingly popular, as they provide an easy way to solicit user input, manage a database in the background, and display data in a controlled form. Typical uses are contact forms (this blog has one), surveys, signup-sheets.   Wufoo is perhaps the most popular standalone form builder, but as popular as they are, Google’s entry to the space will likely bring more visibility to Web form use cases. 

I set up a very rudimentary web form to demonstrate their use, but I am cheating: I took the data from Google Operating System and populated my database – sorry, Ionut, I don’t get anywhere close to your huge reader base.smile_wink   Please fill out the form below.

Although the form captures the time of entry, I am not displaying it below, to demonstrate that once can control the re-use of data after user entry.

You can manipulate the above data, filter it, sort it by clicking on the column headers, search the contents…etc. 

Oh… is this more than you’ve seen on the other Google forms?  And they’ve told you the lists were not embeddable?  Sorry .. I’m cheating: I’ve re-created Ionut’s  form in Zoho Creator. smile_tongue  (Disclaimer: I am an Advisor to Zoho – but I am making a point by doing this.)


Different people will always prefer different tools.  I don’t have any statistics, but I would assume the number of users for database-like tools (MS Access, Dabble DB, Zoho Creator & DB) is by an order of magnitude less than the number of spreadsheet users.  A lot of basic spreadsheet users don’t perform calculations, don’t use pivot tables – they just  create tables to track lists. (See my earlier rant on why JotSpot’s tracker is not a real spreadsheet).  For their sake it’s nice to be able to have simple form support inside a spreadsheet, which is what they can now get from Google.

Several reviewers of the new Google Forms were missing field verification, calculated numeric fields…etc. These features and more are supported in Zoho Creator, which in fact allows you to build mini-apps by dropping script elements, without actually coding.  Those who want more database manipulation can use Zoho DB. These are powerful applications, but which one to use when can be confusing to less technically inclined users (like yours truly).  Hence simple forms in a spreadsheet are a good idea.   But let me dream a little – here’s how I’d like to see web-based collaboration some day:

It won’t be about formats and applications – it will be about free-flowing thoughts and the data encapsulating them.  Of course there will be differences in application capabilities, but it’s entirely likely that what you can manipulate in your database application, I will access using a spreadsheet. Likewise, I may write something in a wiki, and you want to edit it in an online word processor.  It’s not a dream, we’re heading that way.  For example Zoho’s wiki and Writer apps share a basically similar editor, Zoho DB introduced pivot tables which will show up in Sheet in the near future.  I am impatient, would like to see this sharing happen faster, but have to accept the realities of how the leading Web companies work: individual products first, integration later.  But we’ll get there… to the vision of format-less web-collaboration.

Oh, and until then, Welcome Creator Mini Google Forms.smile_teeth

Related posts:, Download Squad, Digital Trends, Sunny Talks Tech,, Compiler, Search Engine Roundtable, Googlified, Search Engine Journal, CenterNetworks, Google Operating System, TechCrunch, Google Blogoscoped, SEO and Tech Daily, Lifehacker, Gear Diary and Techmamas


Microsoft Decides You Don’t Need Your Old Data

Do you think old, archive data on your computers is safe? Think again. Or just re-define safe: so safe that you can’t access it yourself.

In it’s infinite wisdom Microsoft decided certain old documents, including those created by their own Word, Excel and PowerPoint may pose a security risk, so they decided to block them in Service Pack 3 to Microsoft Office 2003. SP3 came out in December September (thanks for the correction) so you may or may not have it yet. Here’s the “fun” part:

  • There is no clear definition of what’s blocked: the easy one is PowerPoint, where anything before 97 is dead, but as for Word or Excel (let alone other, previously compatible programs), you have to rely on this cryptic description by MS.
  • There is no warning whatsoever at the time of installing SP3
  • Even if you know what’s coming, there’s no way to easily locate and convert what is about to become inaccessible on your computer. Disaster may hit months or years away, when you need to access an archive file, but can’t.

Now, before you shrug it off, remember, this isn’t simply abandoning users still running pre-historic versions of software; we’re talking about data files here. You may run the latest release of all applications and still have no reason to touch old documents. After all, that’s what an archive is all about – you *know* your documents are there and will be accessible, should the need arise at any time in the future.

Back in the 80’s and 90’s paperless office was a popular phrase but remained largely a dream, since a lot of information still originated in paper form. The balance has largely shifted since then: the few things I still receive in paper format either end in the waste-basket, or I quickly scan them trusting that with cheap storage and powerful search I will always be able to pull up anything I need. I am finally living in a largely paperless world. But Microsoft just violated that trust, the very foundation of going paperless. Of course I shouldn’t be entirely surprised, this coming from the company which previously decided that the safest PC is a dead PC.

Solution? Microsoft offers one, in this article: tinker with your Registry, an admittedly dangerous, and definitely not user-friendly operation. I prefer Wired’s alternative:

Naturally, there’s an alternative which is somewhat easier (and free): just grab a copy of OpenOffice which can handle the older file formats. Once you’ve got them open, now might be a good time to convert them to ODF documents lest Office 2017 decide to again disable support for older file formats.

And of course I wouldn’t be mesmile_wink if I didn’t point out that this, and many other headaches simply disappear when you ditch the desktop and move online. Web applications typically don’t have major new versions, they just get continually updated (e.g. Zoho updates all their applications every few weeks). When that’s not the case, like when Zoho Show 2.0 was released recently and it required updating the user documents, the service provider takes care of it. They work for you – you don’t care about program versions anymore, just have access to your data. Anywhere, anytime.

Related posts: CNet, Ars Technica, Compiler , An Antic Disposition, AppScout, Security Watch, Download Squad, Blackfriars’ Marketing, Feld Thoughts. The winning title comes from The J-Walk Blog: Office 2003 Downgraded With Service Pack 3.

Update: Phil Wainewright brings up an entirely new aspect of this issue: Microsoft breaks the perpetual licence covenant.


Zoho DB for Data Manipulation & Reporting

Impeccable timing: just days after Computerworld named Zoho Creator one of five web apps they can’t live without, Zoho DB is released today. While Creator is an application generator, DB is primarily for data manipulation, analysis and reporting. You can create a new database or import your dataset from an existing spreadsheet, be it Zoho’s own Sheet or MS Excel. The UI is instantly familiar, as it reminds us of a spreadsheet, but one with drag-and-drop goodness, allowing the user to easily analyse data, create charts, reports, which, as typical with Zoho apps you can embed in your web page or blog, and of course other Zoho Apps.

Fur deeper analysis you can create Pivot Tables with simple drag & drop. Zoho DB Supports Query Tables – tables created based on a select query from a different table. It understands queries in many SQL dialects: Oracle, SQL Server, DB2, Sybase, MySQL, PostgreSQL, Informix and ANSI SQL. This sets Zoho DB apart from the rest of the industry, and it’s made possible by leveraging another Adventnet (Zoho’s parent) product: SwisSQL. In the near future it will also allow users to import and export database schemas.

The best way to get a feel for the capabilities is to watch the video introduction, then get your hands “dirty” by diving into Zoho DB yourself.

Some of Zoho DB’s features will soon be available in Zoho’s spreadsheet application giving users a choice where they analyze their data – and of course you will be able to access the same data via applications built with Zoho Creator.

Attendees at the recent Wiki: Beauty & Beast event heard Zoho’s Raju Vegesna talk about how eventually Word processors like Zoho Writer and Wikis should morph into each other. This may sound off-topic, but it’s another hint to Zoho’s philosophy of allowing users access their data via their application of choice, no matter which other application they used to create it. It’s all about the (work) flow, not data formats.:-)

See also: TechCrunch, Read/WriteWeb, CenterNetworks, Zoho Blogs , Mashable!, Between the Lines,

Update: Ouch, Rod reveals Zoho’s most secret plans: Today – Zoho DB – Tomorrow – Zoho Beer

Update (9/6): Ask Zoho: What’s the difference between Zoho DB, Creator & Sheet?


Microsoft is Freeing Users from Office-Prison

The likely reason news of Microsoft’s Office 2007 “Kill Switch” did not cause a lot more uproar is that it surfaced during Thanksgiving week:

“Buried in a Knowledge Base article that Microsoft published to the Web on November 14 are details of Microsoft’s plans to combat Office 2007 piracy via new Office Genuine Advantage lockdowns.

Office 2007 users who can’t or won’t pass activation muster within a set time period will be moved into “reduced-functionality mode.””

As unpopular as this move will be, it’s perfectly within Microsoft’s rights to dump users who don’t become customers. The question is, is it a smart move? ZDNet attempts to do the math in The economics of Microsoft’s kill switch:

“Would you sacrifice $10 million in sales to prevent $1 billion in software piracy? How about $100 million? How many customers would you annoy?”

I don’t think it’s simply a numbers game. Whatever Microsoft’s “loss” to piracy is, it’s not going to be converted to sales. First of all, the “kill switch” comes with the retail product, large corporate customers volume licence is not affected.  So we’re talking about smaller businesses and individuals (I am focusing on the US market). A fraction of these may be “forced”  to buy a licence, but the large majority won’t.   What we really need to look at is why these users run MS Office in the first place.

“The simple argument that ‘this is good enough for 90 percent of what we do’ has fallen on its face over and over and over again,”Microsoft would like us to think.

I don’t buy it.  I don’t use fancy features in Word, have repeatedly stated that my Excel skills are on the level I learned using Lotus 1-2-3 – yet I have Office on my computer.  So does virtually anyone who occasionally needs to receive/send files to Corporate America.  Not because they need all the features, but out of fear (losing compatibility) and laziness.   But believe me, these users will rather switch to another product than shell out hundreds of dollars for a MS licence.

They might actually find the experience quite rewarding.  OpenOffice is a free alternative, but it’s big, clumsy, needs installation and updates just like MS Office – web-based alternatives, “Office 2.0” products are increasingly powerful, fast, easy-to-use, and allow one to access files anywhere.  It’s safer in the cloud smile_wink.
Office 2.0 vendors bend over backwards to make it easier to work with Microsoft files.  Zoho ( a Client of mine) has a full online Office Suite that easily imports MS files, and of course saves your work in doc, xls and other MS formats, just as well as PDF and several others.  The Zoho Quickread plugin allows opening of any MS Office files directly from the browser (IE, FF) without first importing/converting them. Tomorrow Zoho will release plugins for the major MS Office products, making it easy to save files online directly from within the Office applications.

The danger for Microsoft is not the direct financial impact of these users turning away from their product, since the never paid in the first place. It’s losing their grip; the behavioral, cultural change, the very fact that millions of people – students, freelancers, moonlighters, small business workers,  unemployed – realize that they no longer need a Microsoft product to work with MS file formats.  Microsoft shows these non-customer users the door, and they won’t come back – not even tomorrow when they are IT consultants, corporate managers, executives.  That’s Microsoft’s real loss.

Update (11/30):  See TechCrunch and the Zoho blog on the new announcements.


Zoho – the “Safer Office”

It’s somewhat ironic that in the very days I’ve just written about Duet, the joint SAP-Microsoft product, I am seriously thinking of escaping from Microsoft-prison, and switching to the most promising WebOffice (Office 2.0) suite. Perhaps I am part of the trend that prompted Vinnie to consider Duet a “nice-to-have” only, but generally too little, too late. (I actually disagree with him, Microsoft’s lock on corporate users is far heavier than on individuals or small businesses.. but that’s another discussion). Update: I’ve had this post half-written for a while, and now we’re getting warned left and right: “use Word in safe mode“, “don’t open Word attachments from Outlook” – the fix from Microsoft is not expected until mid-June. WTF? That’s three weeks away! I am sick of it, just as much as I am sick of Outlook forgetting where the address book is again, freezing on me frequently, and I am especially sick of MS crippling my computer via the automatic Windows updates. While I can’t get rid of Windows (just yet), I can certainly get rid of buggy unsafe Office. Office 2.0, here I come!

But what’s Office 2.0? First of all, terminology: some call it Office 2.0, others Web Office: the point is to have web-based applications that are accessible via a browser, without any download, that will store the data files on the web, too (sorry AjaxWrite, you are out), thus making all my stuff accessible from any computer, any time (as long as I have Internet access).

I’ve been using Writely for a while, so when I first found Zoho Writer, it was a non-event: both editors are equally good, convenience wins, no need to switch. Are any of these Microsoft Word killers? Scoble would laugh it off, they would not stand a feature-by-feature comparison. So what? I am part of the 90% crowd that barely uses 10% of Word’s functionality anyway. Then I found Thumbstack, a web-based “mini-powerpoint”, that allows me to share and collaborate on presentations easily. It does not do a lot of fancy things, amongst them the animated transitions – great, so now I can focus on substance in my presentations, rather than disruptive entertainment. What about a spreadsheet? Zoho Sheet is easy to use, and is aesthetically pleasing – a point so often missed. Is it as poweful as Excel? Of course not. But my Excel knowledge is probably on the level of Lotus 1-2-3 anyway, so for me, Zoho is the Excel-killer. I also have Stikipad, Calcoolate, … and a few others – all in my Firefox “Office 2.0” bookmark.

The only problem is, when I am not on my own PC, sometimes I forget what’s where… and of course my data files reside with the various service providers, and I am not completely at ease with my digital life being so fragmented. See where I am heading? This move to the Web is liberating, but the plethora of different services causes a bit of chaos. There are two basic concepts to deal with the chaos:

  • Some of the Web storage companies, like, Omnipage, Openomny ..etc .. offer their open API’s to application providers, or make one-to-one tight integration and propose that we store all our data centrally, no matter which application accesses them. This is definitely a step forward, in terms of data management, but I am still dealing with point applications, without any integration between them..
  • The second concept obviously is one-stop-shopping: is there one service that offers ALL the MS Office capabilities (with the common simplification we just discussed)? The answer is increasingly yes: Zoho is releasing new applications at an impressive speed, and they come with 1G of storage. While I would not have left Writely for the sake of Zoho writer only, the abililty to have everyting under one hood is just too damn tempting. I can have Writer, Sheet, Presenter (due out in the very near feature) all from the same source, my data is stored at the same place, and although currently these applications require individual registrations, in the near future they will be available with a single sign-on.

The Zoho guys also promise integration between these applications, and I have reason to believe they will be able to pull it off – after all, they already have the Zoho Virtual Office, which incorporates several of these offices in an integrated fashion. AdvantNet, a 500-person company (of which about a 100 work on Zoho) runs entirely on Zoho Virtual Office. Currently Virtual Office is a downloadable server-side product accessible via the Web, but Zoho will offer a Web-hosted version in the future. Without integration an Office 2.0 is not really Office 2.0, just a collection of online applications. (For those who may not remember, it took Microsoft long years to achieve some level of integration in their Office; for several years and throughout several releases “integration” was copy/paste, and quite painful as such.)

Zoho leverages a good deal between the different product offerings: some parts of Virtual Office make it into the individual applications, and vice versa, some of the standalone products become part of Virtual Office. For example 1G storage is now an implicit part of using the applications, but Zoho Drive will soon be available as a standalone service, too. Ah, and let’s not forget about Zoho Creator, which is exactly what the name suggests: an easy web-application creator. They even go beyond traditional Office functionality, into the transactional world buy providing Zoho CRM, a web based, or downloadable full-featured CRM system. Fully featured means supporting the full sales-related workflow, including vendors and purchase orders all the way to sales orders and invoicing… definitely more then just a “glorified contact manager” as the other guy is often referred to.

Listening and responding to customers is an area a lot of companies fail nowadays – Zoho seems to excel here, too. As part of research for this post I looked at earlier reviews, and several features reported “missing” from Writer are already included in the current product. There is a direct feedback link from the applications, and the longest response time I experienced was a few hours – sometimes it’s just minutes. In comparison, a question I posted on the Writely forum over two weeks ago is still unanswered – I guess those guys are busy finding their place in Google.

Summing it up: Zoho pumps out new applications at an amazing rate (check the site for a few more I haven’t even mentioned). While one by one most of their applications are comparable to at least another web-based application, I am not aware of any other company offering such a complete suite, with that level of support and the realistic prospect of integrating the applications soon. For me the choice is obvious: Zoho is my Office 2.0 Suite.

I’d like to touch on another issue, namely the value of being first, “original” vs. doing something better the second time – but for the sake of readability I’ll break it out to another post – soon.

Update (5/27): Assaf, who made blog conversations really trackable by bringing us co.mment read my post and gave the Zoho Virtual Office a try. His overall impression is positvie, but he also includes some criticism – just as he should. One thing I learned is that Zoho listens and moves fast. Another obeservation (of mine) is that they seem to move in iterations:

  • The downloadable Zoho Virtual Office has been around for a while (they run a 500-person company on it)
  • Now they are focusing on individual “Office” components making them available on the Web
  • Finally they will relase their own hosted version of Virtual Office probably incorporating may improvements they’ve made in the standalone products.

Update (6/6 -yes, the famous 666!): Google Spreadsheet is out, the blogosphere is abuzz, and I won’t have the time to write today, but at least I wanted to point to Ismael’s article, since he arrives to the same conclusions I did…