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.

Office by subscription? What??

News out today that Microsoft is going to offer to sell some versions of its desktop software on a subscription basis. This will be done in typical MS fashion under a cool product name “Equipt”. Confusingly some are calling this part of their S+S play but it seems that the software is locally installed so its not really “SaaS” – just the update feature…

My initial reaction? Cringe… I mean clearly this isn’t SaaS. The cynic in me leapt to the conclusion that this was a lame attempt to combat SaaS with a subscription model.

But then in an IM chat with Ben Kepes I had an epiphany;

What if this is a test case? What if MS is attempting to see if the success of SaaS is in its technical innovation – the software itself and how it’s delivered – or just in its commercial approach – subscription pricing.

Even if MS didn’t plan it that way perhaps we, the public could view it that way? Interesting piece of research in its own right?

Your thoughts as always, are welcome.

Salesboom.com move makes a lot more sense

This one's for Rami at Salesboom.

 This week saw the announcement of Salesforce.com integrating with Google Apps. Ben Kepes covers it well here. The key point being that the announcement is a PR gag because the reality is that north of 90% of the enterprise  use MS exchange or lotus notes. To my mind it really misses the point 

So…. enter Salesboom.com. Who have come out with a Outlook Edition. As far as i can tell, its doing everything the salesforce thing does..but in a true enterprise app…

Nice one! 

Anonymity. The web and SaaS.

Ben Kepes and I recently locked horns over this topic. As you can tell I like having anonymity on the web. There are various reasons for this, but my primary concern is security and keeping some clear demarcation between my private and business life. I don’t blog in the weekends or evenings, nor do I work unless absolutely essential. I made some lifestyle decisions a few years back & have never regretted them.

It is my assertion that in my private life I can be web 1.0 or even (gasp) bricks & mortar,  while in my business life I can be 2.0 & think SaaS is the bees knees.

Ben conversely thought this paradox not only odd, but it represented a doomsday scenario for SaaS.

Let me start by pointing out various posts which hopefully will go some way to explaining my security fears. Steve Borsch does a great job of explaining the Google ‘threat’ and expands on this with some insights into data mining. Then there is the growing infringement of governments on ‘our’ data and viola, I feel vindicated. I know that the ability exists for people to piece it all together, but that doesn’t mean I have to make it easy for them. Shel at thinks this is being anonymous is lame, but I would suggest that anonymity is not only a right but a desired state for some (look at 2nd life).

So how does this affect SaaS? Well to me not at all. I am completely comfortable with cloud services in a work environment. I would love it if by some AJAX phenomenon someone matched my revenue with products that could aid me I or did something funky with my search patterns. I would love a tool that examined my calling patterns & suggested ways to save money. Or something that monitored where I & my Staff go on the internet to manage cyber-slacking etc……I just don’t want any of it in my personal life. I don’t want MS money analysing my spend patterns,  knowing how much I earn & doing any product matching based on their knowledge of my search & surfing behaviour.  That is too intrusive to me, that kind of scenario opens up the world painted by Fake Steve Job’s here.

 

It will make the old Bell System crooks look like amateurs. The guys running the cloud will control everything: phone, data, video, television, movies, music.

 
That’s ok in my business space which is open to compliance & monitoring & all those things. But in my world, it’s not ok in my personal life. And like I said, I think I can make these two work quite happily.

Who will own the SaaS future –

Ben Kepes read my last post and disagreed with my assertions

In an enterprise world, tied as it is to Outlook, MS Office in general and oftentimes IE to boot the above statement carries plenty of validity. However my contention is that the future (my emphasis added) is about small, nimble and agile organisations, the sort of organisations that run on Zoho, Google and Twitter.

I think Ben is missing the point. By definition the future is it an unknown entity. In fact in planning circles, HR and a lot of industries its well accepted that the best predictor of the future is the past. If you accept that premise then MS is in good shape. They missed the internet, but won the browser wars (should that be massacre), they missed home entertainment, look where Xbox is now. Search, webmail (msn) …. The list goes on. Music should be mentioned, its one area where they’ve not made it. Point is, a lot of those functions are consumer and they were late into the game.

 
The second point I’d like to call Ben up on is his assertion that all consumer users will be early adopters.

I use MS Office but I use Google apps or Zoho roughly 10 times as much as I do MS. Similarly I email with Google and browse with Firefox. We CRM with an Open Source/SaaS product and project plan, specify and Wiki with similar solutions.

Sure they have consumer eyeballs and enterprise eyeballs, but consumers will tend more and more to being earlier adopters and will outrun MS developments and even enterprise is starting to see the value in the new, nimble and alternative options.

My pick is that the operating system/windows live tie up will buy MS some time, but a reinvention is what’s needed if they really want to win this race.

 I’ve met Ben, he’s a great guy, but I wouldn’t call him representative or typical of you’re average small biz owner. I’d put him quite a long way to the left of the adoption curve. In this instance I think Ben has fallen into the trap that most people who play with IT a lot do. That is assume that everyone is the same as themselves.

 
I think most small businesses owners are innately more conservative, further back on the adoption curve and more likely to fly toward quality. Things like brand and trust will play here. Again all factors that play for MS.

The Customer Cost benefits of SaaS.

Hot on the heels of Ben Kepes post about how SaaS companies will have some protection against the looming recession. McKinsey have come out with a piece that analyses the cost benefits to a customer of purchasing a SaaS solution.

 {mosimage}

Given that SaaS is 30% cheaper for the end user, expensible, has more flexible growth and retraction capabilities and delivers business benefits faster. I would say that things are looking quite rosy for the SaaS sector.

Added to this the VC and share market has shown a willingness to continue to shove money its way too (maybe they understand the things listed by Ben, but I suspect it’s more a swarming affect in action)

I maintain my earliest opinion about SaaS. It delivers true customer benefit. Whether this be cost, flexibility or speed to benefit. If you keep your customers happy you are onto a winner. a position like that makes you truly recession proof.

Netsuite IPO: I don’t get it.

Ok, i’m the first to acknowledge that when it comes to the share market, I’m not an expert. But even I can see that something doesn’t add up on the NetSuite IPO.

 
Problem number 1. The company hasn’t turned a profit in 9 years of operation. If it isn’t making a profit, how then will it fund its product development, support and sales and marketing costs let alone repay the debt it now has to it’s shareholders?

 
Problem number 2. The segment it’s targeted at is highly competitive and given that the offering is essentially the same (except for the delivery method) Netsuite doesn’t have a bunch of differentiation. Ben Kepes discussed this some time ago.

 
Problem number 3. economics. Recent commentary would indicate that the US is heading into a recession. Bob at Smoothspan writes a great piece on the effects of a recession. And while the annuity revenue of SaaS affords NetSuite with some protection, Bob’s number 1 rule of flight to quality doesn’t. That would go to MS, SAP, Oracle and possibly Intuit.

 
Problem number 4. SaaS revenue takes time to grow. My experience with SaaS is that you cannot spike your revenue. Even signing up large customers you are still subject to the rule of 78. So for an unprofitable enterprise who obviously hasn’t got the scale advantages to yet cover its costs (and is still subject to marginal cost per user increases unlike companies that sell CD’s) it would seem to be a long haul to profit and hence dividends. The numbers just don’t stack to me.

 
Problem number 5. Hype. If you are in during the early days of hype good on you. Unfortunately its quite damaging for others who are in it later or for the long term. The Successfactors IPO combined with this one have set a trend. I’m old enough to remember the heady days of 1998-2001, I remember 2002 very well too. I wonder how many investors have long memories too.

 
I’m not bagging Netsuite, i’ve never seen their product or had any dealing with them at all. What i am questioning here is the apparent valuation the market has given them and wondering about the soundness of that valuation.  I guess only time will tell….

 

 

Others are thinking SaaS and social networks

Ok, i know i'm harping on but the coincidence here is more than astounding.

 From my mornings RSS feeds comes instructions from the MS CRM Dynamics team on integrating CRM 4.0 with Facebook. This is exactly what i pointed out in my mis-spelt post of Friday .

The key is marrying the two together in a way that makes sense. Collaboration is one, CRM could be another (facebooks friends function could be called a rudimentary CRM system after all

In a back channel conversation with Ben Kepes, he wasn't surprised at all by this . Saying that this is just mashups in its next evolution and the way of the future…

Perhaps thats more the point of this series. Maybe convergence isn't between different taxonomy…its in the application mashups and the only constraint is the programmers imagination… that and where the money is. 

 

Disruption is a funny thing


Its not just the core construct that gets disrupted. If we take SaaS as our example. I’ve blogged before about who else besides SaaS ISV’s will disrupt on-premises ISV’s. But in an interesting way the auxiliary services are also disrupted. I’ll deliberately use this example from IDC because of its relevance and irony. IDC state that integrators are going to be affected by SaaS, that is disrupted.


Here's where the irony kicks in. Ben Kepes blogged about the absurdity of this piece of news by IDC. And what has struck me is that the research houses themselves arc being disrupted.

I remember dealing with IDC here about 2 yrs ago. At that time IDC didn’t even have a taxonomy that included SaaS. They were calling it hosted application management or HAM. If you’ve ever worked with a research house you will know that if something doesn’t fit the taxonomy it creates a major panic. I think that world is gone, I think we are entering an era whereby online citizen journalism is going to usurp research or even the news. The analysis and insights provided by the likes of Bob at Smoothspan , Will Price and all the others out there are providing more timely, more accurate information than these research houses. I personally rely more on the blogging community than the annual, out of date documents put out by these places now. The only thing lacking (and I mean no disrespect) is the credibility that these houses have, it is very hard to know if numbers put up by Bob or Will are accurate. Unless these companies embrace web 2.0 and revise their methodologies they are in for a rough ride in the future. The speed of change is too dramatic, the pulse of the market is out here on the net not in spreadsheet.

 

Continue reading

More on Customisation

Like I said in my last post, customisation is a fascinating subject when it comes to software. A couple of regular readers have both held forth on the subject (I hope more will follow otherwise this blog suffers from the same issues as Techmeme!! I know, ironic link). Ben Kepes appreciates the concept, recognises the value for non-competitive applications being consistent but holds to the view of customer centricity being infinity valuable. Ben does make the statement that.

doesn’t it start us down a slippery slope to mass-homogenization where there really is nothing different between one enterprise and another”

 Bob at Smoothspan thinks that this isn’t a mutually exclusive scenario. Some things can be commoditised and some things can't. Bob also states that taking things vanilla breaks the rule of IT adding value by not introducing change.

 
Here’s my two cents on it. According to
Michael Porter, there are basically 3 ways companies compete:

  1. They can build a differentiated “best” product in the market.
  2. They can serve a niche better than the “best” product leader.
  3. They can be the low cost provider.

If what I say is true, that a business can take code vanilla (BTW I actually agree with Bob this isn’t a universal truth) they will accrue savings. They will save on code, customisation and implementation. They can choose the low cost provider (by now you’ll see where this is going) they can in fact BE a low cost provider or use the EBITDA savings to invest in other things. These other things could be differentiation of their own product or building a niche channel.

Ben’s version of mash-ups plays to either a (1) differentiated best product but that would be quite expensive to do on a mass scale so it’s more likely to be (2) a niche play. Where’s Bob's example is more likely to be (1) mass differentiation. Simple customisation on a mass scale (sounds a lot like salesforce.com).

So where does this leave us on the debate? I think for consumers and producers of SaaS alike the answer is know your business and your business model, in particular know thy customer. When you do, you can pick any of the above plays to suite your scenario