Ramana Mulpury writes: “A few years ago, if you asked anyone at an emerging software company whether ASP/SaaS/On-Demand (referred to as ASP) solutions were for real, you would probably get a 50/50 response. Over the last year or so, Ive been seeing a completely different scale of adoption of ASP solutions. This scale of adoption can only mean one thing SaaS is here to stay. Not only that, small, mid-sized businesses, departments of large enterprises, and to some extent entire enterprises, are clearly embracing ASP solutions today.”

Enterprise Software Mirroring Home Usage

Barrons’s writes: “Ted Schlein was making the point that enterprise software will increasingly look like what consumers do at home. He notes that the two enterprise applications he uses the most are e-mail and Google. Look for examples of software that mimic what consumers do at home and do it within the enterprise, he says. Corporate directories of the future will look like MySpace. College grads of the future, he says, are not going to want to use the dull enterprise applications now is use.”

Community 2.0

John Hagel writes about communities, ten years after he wrote “Net Gain.”

In reflecting on the experiences accumulated to date by companies seeking to build virtual communities, Id like to focus on four challenges:
1. Language
2. Integrating diverse skill sets
3. Shifting mindsets
4. Organizational barriers

Companies need virtual communities in order to successfully respond to growing pressure on performance coming from two directions simultaneously customers and talent.

SAP and SaaS

ZDNet writes:

[Hasso] Plattner’s description of the next-generation, on demand business suite was similar in many ways to what has developed over the last eight years with its applications, platform and ecosystem, and what PeopleSoft founder Dave Duffield is creating at Workday.

SAP is late to the on demand game, but has been working over the last three years on A1S to catch up. Plattner said that SAP’s A1S on demand offering will be broader than or Workday, covering the entire business suite and different industries. In that context it sounds closer to NetSuite in covering the entire spectrum of core business applications, but SAP has the advantage of deep expertise across industry verticals, a set of more than 2000 enterprise services and a large war chest for marketing the products and services. Plattner views SAP’s role as spawning an ecosystem of innovation and serving as the primary trusted partner to customers.

Software 2007

Tali Aben writes about the recently concluded conference:

SAP: Hasso Plattners key message: not only small companies can innovate. As he presented SAPs new offering for SMBs, what I heard was not innovation but rather catch-up. Sorry however, its still impressive (since often, large companies cant do that either), but SOA, On-Demand, Collaboration, Community, Standards, etc. are themes weve been hearing about for quite some time. Marc Benioff is a great presenter. During his session, I kept thinking of my Israeli entrepreneurs why cant they speak like him! He reminded all of us that was a catalyst for change in the software industry. Very true. Initially, the users were SMBs, but now, thats not the case anymore. Marc then went to pitch a new platform that will allow anybody to create and then run new applications on top of this platform, empowering users and ISVs to build next generation apps. This company is moving beyond just being a single application, to providing a platform, with multiple applications. Sounds like a familiar strategy. perhaps, they should rethink the name of the company

Web-based Collaboration Tools

Forbes writes about nine such tools, and adds a cautionary note: “Bear in mind before you jump in that you’re giving information to a third-party company to store. If you’re not in IT, you should talk to the IT department to be sure you’re not violating company policy by using these services. And, even if you’re in IT, before you use these services, you should talk to your company’s legal and compliance offices to be sure you’re obeying the law and regulations with regard to managing company’s information.”

Google Apps

The New York Times writes:

On Thursday, Google, the Internet search giant, will unveil a package of communications and productivity software aimed at businesses, which overwhelmingly rely on Microsoft products for those functions.

The package, called Google Apps, combines two sets of previously available software bundles. One included programs for e-mail, instant messaging, calendars and Web page creation; the other, called Docs and Spreadsheets, included programs to read and edit documents created with Microsoft Word and Excel, the mainstays of Microsoft Office, an $11 billion annual franchise.

The e-mail and messaging package, which is based on products like Gmail, Googles e-mail service, has been available in a free trial since August and is supported by advertising. It has been used by thousands of businesses, educational institutions and other organizations, Google said.

SaaS Opportunity

Sramana Mitra writes:

Last Fall, I wrote a widely read piece called Venture Capital in India, in which I pegged the Indian venture boom to be largely in Real Estate, Retail, and to an extent in Consumer Internet, not much in actual technology.

Last week, Sujai Karampuri made a well researched case for technology product companies in India.

In the recently concluded Philippe Courtot interview series, we discussed at length the various ways in which India and China could undercut US companies, and Philippe acknowledged that in his business (Qualys is an outsourced managed security service provider, a SaaS play), it is quite possible that an Indian company could come up with a vastly lower cost structure, and customers would switch immediately, if they are convinced about the reliability of the service.

Just to set the economics in perspective, Qualys has invested $65 Million to build an infrastructure that “is at the scale of the planet” to monitor, audit and report network security problems.

Let me throw a challenge in the direction of the Indian entrepreneurs: Go figure out how to build this same business for $30 Million, and I can tell you, you will have an absolute winner in your hands.

ps. You can read the Courtot interview here:

[Part 1]
[Part 2]
[Part 3]
[Part 4]
[Part 5]
[Part 6]
[Part 7]
[Part 8]
[Part 9]
[Part 10]
[Part 11]

Social Enterprise

Bambi Francisco discusses the future of the workplace in the context of the MySpace generation:

I imagine that this college student’s future corporate life will be as Web 2.0 as his consumer life is now — an egalitarian world in which everyone contributes, opines, votes, connects, shares and collaborates instantly.

For instance, by the time he starts receiving corporate memos, he may feel it’s his right to immediately post a comment or edit every one he reads, even if it’s an internal memo to employees from his CEO. He may also think that he has a say in voting on whether the memo should receive a thumbs up or thumbs down. Imagine a note to employees from future CEOs with links at the bottom that says “comments” and “ratings,” and, dare I say, “edit.” Talk about making higher-ups feel accountable, and out of control.

Need for SaaS Platform

Will Price writes:

One can only hope some form of platform infrastructure emerges to accelerate SaaS companies development. If not, the merits of SaaS will be challenged by the time, capital intensity, and delayed profitability of the model. Platform companies Powersoft/Sybase, ORCL, MSFT drove down the costs of building client/server application companies. The industry needs the SaaS analogs to unleash the power of the model at the cost optimal level.

A simple analysis holds that Fixed Costs/Gross Margin = breakeven revenue. While for SaaS this is a somewhat circular calculation (as in SaaS fixed costs are amortized into COGS), the rise of platforms will drive down fixed and allow SaaS companies to reduce capital required to get to scale. Fixed costs must be reduced in order to unleash the full power of the model and the rise of platforms will reduce the bespoke investments historically required to build SaaS companies.

Enterprise MVNO

Daniel Taylor writes about the requirements:

* Improved, enterprise-class help desk and customer support.
* Separation of business and personal liability on mobile devices used in work environments.
* The current inability of IT departments to actively manage mobile users.
* The breakdown of the user/payer model in enabling IT enforcement of corporate mobility policies.
* The cost of international roaming.
* The lack of integration between carrier services for voice and data, even for services delivered to a single device.
* The lack of integration between carrier and enterprise networks for mobile applications.
* The limit of behind-the-firewall connectivity to only a handful of mobile users.

Offshore Outsourcing Predictions

Sadagopan writes:

1. Offshore majors would work on coming out with a viable approach towards offerings centered on disruptive technologies like SaaS. Global majors may work hard to demonstrate better value add to their customers leveraging their offshore presence.

2. New breed of offshoring players with different business models shall spring up. Innovation in services space would continue to come out of India.

3. We may further see change in the rankings and growth rates amongst the top 10 offshore players change based on their business models and their organizational strengths. The era of an almost automatic growth is giving way to more deterministic models of growth pursued with deliberation and delivered effectively.

4. The threat to the offshoring services industry would be coming in form the IT infrastructure utilities – though this may be few years away. We may see some pioneering efforts by a few business units in adopting these and may also see offshore providers coming up with hybrid approaches to adopting to IT utilities(as part of their evolution)

Enterprise 2.0 Predictions

From the list of 2007 predictions by Dion Hinchcliffe:

Not a dent will be made in 2007 in the installed base of pre-existing collaborative tools such as e-mail, telephone, and IM. But the groundwork will be laid for a noticeable shift in 2008 as managers and workers discover the advantages of increased corporate knowledge retention, far better location of relevant business information, and emergent structure in terms of tagging and linking. And I suspect that tools that integrate e-mail, telephone, and IM into Enterprise 2.0 environments will see the biggest early success.

Enterprise 2.0 and Office 2.0 will face off as leading new terms for online business software and no one will win. Enterprise 2.0 is a broad a term that with it’s automatic association with organization-scale back-end systems will struggle to maintain it’s particular niche in freeform, emergent, social software tools for knowledge managements. Office 2.0 is a nice sized umbrella but tends to refer too much to the client-side aspect and not enough on the back office side. Will they merge or just remain convenient short-hand that evolves through next year? The label debate is important because we need effective short-hand labels to identify the fast moving trends in our industry and for now my vote is with the latter trend.

Enterprise IT

[via Sadagopan] Robert Metcalfe says: “From my point of view, there’s little new in IT, particularly in enterprise software. Video might take Computerworld readers by surprise. There are three major forces – video, mobility and embedded – all three of which are nipping at the edge of IT. Video burdens IP networks, and they haven’t quite seen the value proposition, but CIOs will eventually have to embrace it instead of fighting it. For mobility, the platform of choice is increasingly cell phones and less desktops. Cell phones are now a platform for enterprise applications. Embedded software, such as RFID, hasn’t quite made it yet. To make enterprise applications more aware of inventory or the supply chain through RFID and sensor networks – of the three things, this is the furthest away from impacting CIOs.”

Video for Business

WSJ writes:

Non-media companies, until recently, had been relative laggards in the video field. But that’s changing rapidly, driven less by the desire to entertain than to deliver corporate messages more effectively via their Web sites.

“Corporations are just beginning to see [online video] as a real option to help cut costs and communicate,” says Colin Dixon, a research analyst for Diffusion Group, a research firm. “Just from last year to this year, there’s been a significant jump.”

The rise partly reflects the work of small companies such as the FeedRoom Inc., Reflect Systems Inc. and VitalStream Inc., which offer services and technology that make it easier for companies to hop on the online-video bandwagon.

Indian IT Consulting Firms

[via Sadagopan] Forbes writes in a story entitled “Consultants from Chennai”: “The top five Indian players in consulting (Tata, Infosys, Wipro, Satyam and HCL Technologies) have averaged 30% revenue growth this year, while the largest U.S. players have averaged just 4%, according to Datamonitor senior analyst Patrick O’Brien. The Indian firms see consulting work as a way to maintain their competitive edge in the face of wage inflation in India and the rise of Chinese data processing firms. The labor arbitrage is not what it used to be. Wages for project managers in India have increased 23% per year from 2000 to 2004, while salaries for programmers have increased at a 13% pace, according to the McKinsey Global Institute.”

Enterprise 2.0 in 2006

Dion Hinchcliffe writes:

Enterprise 2.0 describes the use of the latest freeform, emergent, social software tools that hold the promise to significantly improve the ways that we work together and collaborate. As an example, the liberal use of internal blogs and wikis with discoverable content frequently forms the foundation of an Enterprise 2.0 software strategy.

All in all, it’s been a wind-up year for Enterprise 2.0 and 2007 will likely prove the year that IT departments really get their hands on the tools, find out what works and what doesn’t (yes, letting the right mix of features and technologies emerge naturally), and for the first well-run case studies to report their results. But you can count on some continued controversy, particularly if there are any high-profile failures of Enterprise 2.0 rollouts, which instead of outright technology failure are at high risk for governance issues of various kinds.

SaaS Future

Phil Wainewright writes:

Aggregation, integration, mashup platforms and ecosystems are going to be hot topics in software-as-a-service circles next year, according to a group of vendor CEOs who sat on a panel at the SIIA’s OnDemand Summit in San Jose. I was intrigued to hear how much unanimity there was in their responses when asked to predict the most notable trends looking just six months out. They are obviously all thinking about how to link up their offerings with other vendors’, and what the risks and opportunities might be for them.

One of the less obvious risks that surfaced is an interesting one. There’s clearly a shared belief that integration will happen through some kind of hub though no clear view as to whether that hub will be a platform, a marketplace or a customer-facing aggregator. The inherent risk here that vendors have to be wary of is the potential to become dependent on and perhaps at the mercy of an intermediary who takes control of the customer relationship. Several vendors were evidently alive to the flipside opportunity this represents of themselves becoming the hub that others depend on.

Enterprise 2.0

Andrew McAfee writes:

I met yesterday with David Deal, Ray Velez, and Amy Vickers from Avenue A | Razorfish, a 1000 person, $190 million interactive services firm headquartered in Seattle. AARF helps clients with digital marketing and advertising, with their customer-facing websites, and also with their Intranets and Extranets.

What I found most interesting about the company was its own Intranet. To hear David, Ray, and Amy tell it, the company’s traditional static Intranet — the place where an employee would go to look up benefits information or peruse the latest press releases — still exists, but has been marginalized by a suite of Enterprise 2.0 tools.

Enterprise RSS

InfoWorld writes:

RSS (really simple syndication) is a favored XML format for individuals to get information from sources such as news sites and blogs. In fact, a recent Pew Internet Foundation survey found nearly one in three individuals consumes RSS feeds. But for enterprises, the most telling response was that 63 percent of these RSS users subscribe to work-related feeds.

That latter finding shouldnt surprise IT managers. After all, RSS readers are easy to install and use. This technology does a fine job helping workers cut through irrelevant information that floods portals, enterprise search results, and e-mail. But as RSSs popularity rises, so do risks. For example, precious network bandwidth is consumed when many employees update the same feed. Plus, there are security risks associated with accessing inappropriate feeds.

To get around these issues and give more employees the benefit of RSS, organizations are adopting enterprise RSS solutions. I tested three hot products in this burgeoning area: Attensa Feed Server, NewsGator Enterprise Server, and KnowNow 3 Enterprise Syndication Solution.