The perfect storm

While the financial markets are in turmoil, and interesting thing happened. The SaaS market gained a tremendous leg up.

If you think about what has actually happened in the business market, things could not be better for SaaS providers.

  •  Access to capital and borrowings is now significantly harder. Lenders criteria is higher and your share-price (and capital value) has tanked. 
  • We’re on the cusp, deep into or somewhere on the path to a recession. That means businesses are going to cut budgets and staff. The typical do more with less scenario. It might also mean moving to less salubrious offices (including all the hardward and software).
  • IT solutions that can deliver results will get priority, those that have a speedy time to benefit will hit the top of the list. 
  • The business will take charge. If you earn the bucks you will have more of a say in how things are done. This is great for SaaS as it is often introduced despite (or around) the IT department by the business.

So how would I start to play if i was a SaaS company?

  •  Emphasise the speed to benefit.  The needs of the business hasn’t gone away, the way they might get that outcome has changed is all.
  • Emphasise the lack of IT involvement needed (compared to on prem)
  • OPEX funded model,  user pays, pay as you grow … you get the idea.
  • And if you are confrontational – get stuck into the on-prem crowd. Their cost structures,  the ongoing cost burden, the implementation timeframes , the lack of datacentre required.

I think if you are a SaaS profitable provider,  its game on. (if you are SaaS provider that’s all bluff and bluster then you could be in trouble.)

 

 

My advice to Steve Ballmer on SaaS

 

I kind of like the underdog, I think that is why I’ve been known to come across as pro-Microsoft.  I don’t think I am. I think I'm more interested in seeing some balance in the blogosphere and observing what might actually happen.

To that end, I think Microsoft have done a pretty average job (my editor tells me I’m not allowed to use the word crap) in the SaaS space to date. This is my thoughts on what I’d do to address that if I was in charge of Microsoft.

  • Drop software plus services (S+S) as a market term. I understand that you needed to give your channel a sense that they belong in the future. I agree it is arguable a better description of the future direction of SaaS and that into the medium term we’ll have hybrid cloud and on premises stuff. But what you don’t seem to be getting is that the continued use of this term isolates you. It creates confusion (and distrust) in the user community. It relegates you down the credibility ladder and you miss out on the whole coolness factor that SaaS brings. Get rid of it for now.
  • Focus on corporates. Lets face it, MS is only ever going to be moderately cool so trying to keep current in consumer is going to be a slog. Mobile will be the exception here. Another reason? Because all wealth is generated by businesses. Full stop
  • For God's sake build office so it can be delivered SaaS, truly SaaS.
  • Create a whole new division or company to build this web Office variant. This will get around the politics and revenue substitution paralysis. Do it fast too. Your channel are doing it as best they can by themselves, support them in supporting you.
  • Pick your chosen delivery method for SaaS. Partner or go direct, doing both is a recipe for disaster. You will either blow your marketing budget or alienate your channel. While you are at it, pick which part of the platform as a service play you want to be in. Is it a software platform? True PaaS or a hosting platform? My read on the economics of globalisation is that the localisation required to get around language and local data security laws means you should stick to software stacks. To that end I’d pick the Telcos as the local hosters of choice. I’d also start looking for training partners and integrators. Not even you guys can do it all, where is your ecosystem play? How are you going to make the most of the plethora of application developers who want to make the most of your distribution?
  • Get your pricing right, what you think has value (Outlook!!) now has a market price of $0. Get over yourselves and start thinking about the market and how you can make the most out of other applications and services. Be quick, time is short.
  • Capitalise on the fact that the only part of Google’s stack that never goes down is advertising. Their application play is a support disaster, they have no idea how to ‘be’ a software company. Get stuck in while you can
  • Sort out your version control and interoperability. One of the reasons schools are turning to Google is that they don’t have interoperability issues. No Mac vs MS debacle. Just make it easy for everyone to use your software.

Simple. Anyone else got any advice before I lick the stamp on this?

I don’t get Apple

I don't get why their users are so rabidly supportive. I don't get why they don't cop more abuse for their blatant proprietary practices, I don't get it.

Their products (the small amount i've used) are … elegant, yes i think that is the best word. Functionally maybe no better or worse than competing products overall. But just damn nice to use.
But they have a re-appearing evil side at Apple it seems. They continually try it on, and seem to get away with really draconian practices. Sarah Perez on R/WW details the latest where an app that competes with iTunes podcast was rejected from the [i'm guessing] iPhone approved apps list. The developer then found a way around this and is happily reeping the PR bonanza that this has created.
They've also attempted to use an auto update feature to push their other applications out too.
Why do they do this? Why not more backlash about it? Why the continued sucess? As some of the comments on the R/WW blog suggest, people can vote with their feet… but the never seem too. I just don't get it

Chrome rounds out Google’s platform plays

A year or so ago i went to a Salesforce.com event in which they trotted out a Google Apps exec to support their no software message.  The guy (I forget his name) was delayed coming into Sydney and so was pretty jet lagged. His only piece of take home message   “ we’re [at Google] a big believer in the no software message”

Kinda interesting considering you have to download and install the Chrome software (as an aside is the browser morphing to legendary status, the same but different from ‘software’). This aside, the point was this. Cloud delivered applications require a robust internet connection and a browser.  

This dependency on the browser and its ability to arbitrage Google has meant they’ve had to act and build something. This to me is the same play as Android, something I wrote about a wee while ago. It has nothing to do with the browser, but everything to do with the internet services that Google wants to deliver or protect. Search, advertising and apps.

Android is about giving Google a play mobile where they have no current advertising stream. Chrome is about a applications platform (and i suspect) a tool to get more information about web habits (which will enhance the advertising business).  Google needs this because the ability for adds to be blocked in a browser by a plugin (see Nick Carr’s two pieces on Adblock) or by an ISP are trivial.  This represents a very real threat to Google’s lifeblood… and to their credit they’ve innovated.

Microsoft is trying to but is clearly struggling… the browser as the OS of the future isn’t a picture that they particularly want. For that reason I believe they should get the hell outta the consumer market and focus on business. (more on this in a latter post).  Microsoft are also failing in the mobile space. This piece by Tim O’Reilly really sums up the mess they’ve gotten themselves into. It also supports my hypothesis, Google’s building platforms that they are hoping will be web on-ramps.  How successful they are in doing this will be interesting, given the issues they’ve had with robustness before.  I actually don’t think they care if Chrome dominants or not, I believe that as long as there are others who jump on their path and deliver the same outcome…. Ads served up, easy and reliable access to applications they will be happy

I won’t be using Chrome.

A couple of reasons. Firstly unlike Firefox and Safari and of course the corporate supported IE, it doesn’t seem to get past the companies proxy server.  Second, and most importantly to me I’m not prepared to give Google any more information about myself.

 Don’t get my wrong, I’m a happy user of 3 Google services – mail, reader and analytics . But that’s about all i want Google to know about me. Read Write Web has a good history and synopsis of Google’s privacy  stance. To me, reading that I get uneasy… real uneasy.  Ben Kepes and I have debated this before, I can summarise his position as more trusting than mine. Simple as that.

 I know that Google has a stated position of “do no evil”. I also know what happens in companies when they get squeeze for revenue and profit. Not always the right things.  Reason number 1.

 Another way to think about this. Google is a company of nearly 20 000 people, they’re like a small city in terms of population. And even small cities have bad people.  In the US 1 in every 136 people have been caught and convicted of a crime, if you extrapolate that out it means you would expect a company the size of Google to have 147 bad people.  147 people who could mis-use all that data that they now have the potential to access.

 End of the day its your choice, but you should be aware of the privacy issues associated with cloud services.

  

PS I’ve dropped Firefox and moved to Safari as my browser of choice. I’ll let you know how it goes.