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Archive for September 20th, 2007

Final Picks from the TechCrunch 40

Posted by Bob Warfield on September 20, 2007

Session 5: Productivity & Web Apps

Xobni: A personal e-mail assistant, also “Inbox” spelled backwards.  BTW, ever thought what “Evian” the expensive mineral water spells backwards?  Getting back to Xobni, it is way cool.  Dan Farber has a great review of all the stuff it’ll do for Outlook uses.  His laconic remark that he wonders what Microsoft Research has been doing all these years echoes my own sentiments posted earlier (and Google isn’t a whole lot better, BTW).  Microsoft doesn’t innovate.  In fact, people are joking that they want to go backward from Vista to XP.  If they were doing things like Xobni across their empire, people would be psyched.

Orgoo (1/2 Pick):  Gives you a unified dashboard for all of your email, instant messenger, and chat applications.  I love the concept, but it doesn’t go far enough.  I heard about integrated voice mail and email ages ago, and I still don’t have it.  With a raft of social networks and other things to subscribe to, someone needs to create a dashboard that aggregates it all and tells you where to start when you walk in. 

Session 6: Revenue Models & Analytics

ClickableManage ad campaigns across multiple networks.  We’re going to need a lot more tools like this one.  Imagine one that spans the gamut of Web 2.0 Personality Spaces and does a lot more than just managing ad campaigns.  It’s a big job, but a big company focused on really hitting their Web 2.0 strategy on all cylinders needs help managing the scope of such a campaign.

Session 7: Rich Media & Mashups

XRT3D:  Stands for “Extreme Reality 3D”.  Basically a Webcam watches you and your motions can be used for games and such.  This is cool, but it has been done before.  My friend Barry Spencer built a company around this concept.  Everyone loved the demoes as they do XRT3D, but Barry never could get it to monetize successfully.  Perhaps XRT3D will be better.  I know people I talk to love the Wii because getting some body english into it is just plain fun.

Posted in saas | 1 Comment »

SAP A1S, Now Business ByDesign, is Out! What Next?

Posted by Bob Warfield on September 20, 2007

I gave my prognostication about what it all means before the release in my post SAP A1S Brings Competition to SaaS for the First Time.  As Zoli says over on his blog, the Enterprise Software World Changed Today.  Here’s a roundup of what I’m seeing out there with a few more of my own remarks.

  • Chris Cabrera, CEO of Incentive Compensation SaaS vendor Xactly had a great “welcome to the party” post.  He correctly focuses on the notions that customers have been in the driver’s seat when it comes to defining SaaS, and that SAP can’t change that, while at the same time acknowledging they provide “Big Bang Validation” to the SaaS marketplace.  Jeff Nolan writes over on GigaOm that Enterprise Software’s Future Lies With ISV’s.  With due respect to Jeff, I put Cabrera’s post first because he is right: the future of Enterprise Software Lies With Customers, not the ISV’s.  Even SAP can’t change that.  It is customers that are driving SAP to change themselves, and they will endure considerable pain to do so.
  • Phil Wainewright says SAP gets SaaS.  They didn’t just try to repurpose their existing offering, they built a product ground up for SaaS.  It looks to me from Phil’s post that SAP is still waffling on multitenancy, but that they’re at least directionally correct about it.  They are striving to create a “try before you buy experience”.  This is hugely important for SaaS, and a total departure from the old SAP products.  There is deep SOA as a means of interconnecting modules and bringing in the outside world.  SAP has begun the process of creating a community around Business ByDesign, which is another impressive step forward and a must-have for SaaS vendors.  There are, of course, some challenges too.  There is an apparent lack of customizability, something that few SaaS vendors get right, and that even Salesforce is having a tough time with.  Wainewright mentions a shortage of suitable partners.  Welcome to SaaS, which can be downright partner toxic if vendors don’t take care to create value-added roles for their partners.  He also feels that the SAP execs are not coming clean on whether this product has the potential to cannibalize and whether SAP will stand behind it in times of trouble.  This is a problem nearly impossible for conventional ISV’s to come to grips with.  Cabrera mentions it in his post as well.  For the conventional vendor, SaaS is sometimes in the heading of “be careful what you wish for.”  I would mention in SAP’s defense that as a European company, they have shown a willingness to ignore Wall Street and stick to their guns when they think they’re right.  It isn’t always the happiest thing for the share price on a given day, but when they’re vindicated, all is forgiven.  SaaS has great potential to be that sort of thing.
  • I’ve already mentioned Zoli’s post, but for his part, Zoli mentions the issue I brought up, which is that Salesforce and NetSuite will feel some competitive pain around this offering.  In an earlier post, Zoli predicts that after a series of stumbles and market evolution, SAP will become the dominant mid-market SaaS player.  That’s a bold prediction.  It will be interesting to see whether the schizophrenia of combining the Dr Jeckyl of SaaS with the Mr Hyde of their core business can be overcome well enough for the organization to execute at the level that is needed for such a prediction to come true.  Way too early to say.
  • Nick Carr over on Rough Type flatly says he doesn’t believe Zoli’s prediction.  His post suggests SAP has unleashed a cannibal.  The company most threatened by the new product will be SAP itself.  Their problem may be the success of SaaS itself, particularly if, as James Governor suggests, it replaces the core product with 1/10 the revenue.  I’ve said it many times:  SaaS is an extremely disruptive business model.  Conventional ISV’s can’t switch over on a whim.  Making the change is much like amputating a limb in civil war days because it was preferable to dealing with the infection that might otherwise result from a gunshot wound.
  • And speaking of James Governor’s post on ByDesign, he tells us such things as ByDesign was specifically designed not to require customization, and that SAP expects to add 10K customers a year to it by 2010.  He seems mostly to feel that SAP really missed the boat on their quasi-AJAX UI, which is evidently nowhere near cool.  It’s also a continuation of SAP’s “not invented here” philosophy in that they built it entirely themselves.  Perhaps things would’ve turned out better had they borrowed Flex in the same way Workday did.
  • Grant Gross of Computerworld writes that SAP will invest over $400M in marketing to tell customers about ByDesign.  SaaS vendors should be sending Henning Kagerman a personal note of thanks.  Marc Benioff has been the patron saint of building the SaaS religion, and he now has more help.  If there was ever a doubt that SaaS would keep expanding its base of converts, that should be laid to rest right here and now.
  • Meanwhile, Ben Worthen of the WSJ charges that this is just a too-timid toe in the water of SaaS.  He has zeroed in on the lack of true multitenancy, and the fact the everyone isn’t constantly updated to the latest version.  That’s a pretty big omission.  I can live without multitenancy per se–it largely serves to reduce the ISV’s costs and could be built later, but not keeping customers up to date will reflect negatively on their experience.  Forrester is quoted as saying it won’t matter until a few years down the road when the customer has to do a Big Bang upgrade, but I disagree.  Point revs and patches are the bigger issue.  Tech Support professionals I’ve talked to say that as many as 70% of bugs reported are already fixed in the latest version of the software.  That means a vendor that keeps everyone up to date eliminates 70% of their unhappy Tech Support calls.  Waffling on this article of the SaaS religion is one of those things that makes you wonder whether SAP will carry through on the rest if they meet much pushback from traditional mindset customers.

So there you have it.  A survey after the first day.  Clearly there are a lot of challenges for SAP.  Just as clearly, it is a watershed event in Enterprise Software History.  Time will tell how it all works out!

Posted in saas | 4 Comments »

A Merger of SaaS and Open Source

Posted by Bob Warfield on September 20, 2007

Ben Kepes has some fascinating ideas about how to merge SaaS and Open Source.  I’ll admit, I posed the question to him in response to another post he’d made, but his answers are well worth thinking about.

One of the things Ben asks is why there can’t be a SaaS Open Source company?  In other words, why not open up the source of the SaaS offering?  Given that a tremendous amount of what SaaS provides is Service not software, that’s an intriguing proposition.  Perhaps they could afford to give up some source and open it for others to play with. 

Some questions would have to be worked out:

–  How do we keep SaaS competitors from springing up with the open source code?  My answer would be to keep some essential part of it closed, but to open up the interesting parts to work on.  For example, if we had Salesforce to do over again, Force the platform would be closed.  It’s the razor.  The Salesforce CRM application would be open.  It’s the blade.  This would make it dramatically easier for anyone to add new functionality to the core application.

–  SaaS wants everyone to run the same version.  Open Source allows tons of versions to co-exist.  This one is a trade off.  If you want the benefits of Open Source, new versions have to be able to coexist and customers have to be able to choose which version they want to be on and when to upgrade.  I would envision each version as being multitenant, however.

There are probably a lot of other questions, but I think Ben’s brought up a new business model that may just make a lot of sense to someone.

Posted in saas | 11 Comments »

We Are Using Tools That Simply Were Not Made For The Job

Posted by Bob Warfield on September 20, 2007

So says Albert Wenger on the Union Square blog.  Albert has written an excellent variation on my 70% of the software you write is wasted and Multicore Crisis themes.  Key areas he brings up as “wasted” work that should be handled by the tools include:

– Database tuning

– Hosting

– User Management

– The relational database model doesn’t scale nor make it easy to build apps

– Web servers aren’t set up to make horizontal scaling of apps easy, you have to add “load balancers, reverse proxies, caches and all sorts of other paraphernalia just to make stuff work together”

He points out that most new tools like Ruby are more focused on adding features rapidly and do little to help, or worse interfere with scaling.

The list goes on, and Wenger is right.  Most of the tools we’re using have their roots in the 70’s, when C was invented, 1972 to be precise.  How many of the Web Wunderkind were even around at that point?  C++ appeared in 1983, and Java in 1995.  I read recently the ASCII emoticon is 25 years old.  Mashable talks like its ancient and nearly obsolete, but its on a par with our tools.  Why are we surprised they don’t do the job so well any more? 

Posted in saas | 1 Comment »

Flex/Flash Solve A Lot of Problems: They May Be Disintermediating the Browser

Posted by Bob Warfield on September 20, 2007

Joel Spolsky gave out a big yada yada post over at his blog that wound up saying the browser incompatibility has got to stop.  He draws parallels with how portability won the day in programming languages.  A lot of what he says is right, some of it is just plain wrong:

The winners are going to do what worked at Bell Labs in 1978: build a programming language, like C, that’s portable and efficient. It should compile down to “native” code (native code being JavaScript and DOMs) with different backends for different target platforms, where the compiler writers obsess about performance so you don’t have to.

It’s a fond rememberance, but C definitely made the programmer, not the compiler writer obsess on performance.  C was and is a portable assembly language.  So many of its features include pre- and post- operators, wild pointer arithmetic, and macros are drawn straight from the instruction set of the PDP-11 it was created for.  Writing a C compiler is pretty darned easy, and the list of optimizations you can do on C is relatively short because the language is already basically an assembly language.  But we digress.

Spolsky wants to rely on some sort of compiler to generate Javascript/DOM “native code” that every browser will get right. 

My response, posted to somewhat the wrong place in Sam Ruby’s blog, was to suggest that things like Flex are solving this problem for those that want to build RIA’s.  Imagine my surprise when I went on down the blog reader and found Ryan Stewart saying essentially the same thing!  And there were others, such as Tim Anderson.

There is that old saying: once is bad luck, twice is coincidence, and three times is enemy activity.  Woot!

This made me think back to my 7 Tactics for Building a Guerrilla Platform and see that Adobe (and Microsoft with Silverlight wants a piece too) has used a few of those tactics.  Heck, they’ve used every single tactic:

Tactic #1:  Launch a great application that contains a thinly concealed platform.  Flash was the great application for animation.  Flex is a platform built around Flash.

Tactic #2:  Give away a distributed open protocol.  Flash qualifies here again.

Tactic #3:  Be the middleman and establish a bridge protocol that resolves the differences in other platforms.  Hey, that’s what we’re talking about here, resolving browser incompatibilities!

Tactic #4:  Talk down your platform:  “Don’t mind us, we just want to help web designers make cool stuff on the web.  We like all the other web stuff too.  Tra-la-la-la-la.”

Tactic #5:  Minimize the friction to get in a little bit at a time and maximize lock-in.  Check!  The more content you produce, the more inertia you have to keep you with the platform.  Meanwhile, Adobe tells us they have 99.99999% or whatever it is penetration and nothing else comes close.

Tactic #6:  Quid pro quo.  Give away something valuable to make platform participants unwitting participators in your plans for platform domination.  The Flash player is free.  You do want to see all that cool Flash content, right?

Tactic #7:  Give away a Widget on another platform to subconsciously convert people to supporting your platform.  That Flash in my browser is an awful lot like a Widget, isn’t it?Isn’t it cool to see all 7 tactics at work simultaneously?  Those Adobe guys sure are smart, huh? 

I love it when a plan for world domination comes together…

Posted in platforms, ria, Web 2.0 | Leave a Comment »

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