Archive for September, 2007

Some more on BusinessByDesign…

Published by Ben Kepes on September 20, 2007 in Business, Design, IT and SaaS. 0 Comments

Jim doesn’t like the name, me well I’m kind of partial to the word Design so I’m not dead set against it.

According to a report by Computerworld, SAP states it would invest $400 to $550 million by the end of 2008, and CEO Henning Kagermann called the unveiling of the product “the most important announcement I have made in my career.”

Thats a hell of a lot of money (Xero is investing its NZD15mill IPO fund over 3 years (give or take a bit and yes there will be some early stage revenue for them)). That sort of dosh buys (even with SAP’s behemoth like agility) a broad, robust and fully featured offering.

Business ByDesign is to be priced starting at $149 per user per month, and the service is targeted at businesses with 100 to 500 employees, and it is expected to be widely available by late 2008. Computerworld has more.

Obviously a very differnt market from Xero, bigger businesses an a much higher sub rate (Xero is NZD50/month).

The questions remain;

  • Whether the customers will come
  • Whether the investors will be happy with the changed revenue stream and
  • Whether they are too big to move nimbly enough to keep the product moving

More to come….

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A response to the challenge…

Published by Ben Kepes on September 20, 2007 in Business, Design, IT and SaaS. 10 Comments

I posted here about needing to build brand champions for SaaS startup’s. Bob the Smoothspan wordsmith commented with this challenge;

Turning your customers into “Brand Ambassadors” has always been the dream. The biggest difference between most SaaS and Open Source is that the Open Source customers get something for their participation. They get to shape and “own” the product. Until SaaS figures out how to give something as valuable back to their community, it will be hard for the community to reach the same level.

Ben, in the spirit of Seth Godin’s post about thinking of something very valuable to give your best customer without expecting anything in return, what should SaaS companies give their communities to fire them up?

So here goes… bear in mind that each business offering is different so this advice is very broad brush, I’m more than keen to talk to individual SaaS enterprises to discuss specific strategies for achieving their aim. Anyway;

  • There is no reason that SaaS users cannot feel the same sense of “ownership” as open sourcies. Many open source organisations are viable businesses, there is no reason why a linux business model could not be utilised for a SaaS offering
  • Make your users feel special. If I subscribe to a SaaS CRM service, and obtain extra bang for my back, some extra service that is complementary to the primary offering but distinct, I will feel inclined to champion that product
  • Allow the users to shape the product. Go beyond beta testing and foster a culture of participatory development
  • Open the floodgates - go public with the intention to build a free SaaS product with community led deveopment and build in an alternative revenue stream other than subscriptions
  • Find a niche that is so under-served by current offerings that just by creating a product (free or subscription) you attract passionate champions
  • Adopt a persona of the underdog, appear to be a fighter battling the incumbents
  • Find a vertical that is unserved by traditional software offerings - Facebook bought social networking to a bunch of non social networkers. TradeMe introduced internet auctions (and in many cases the internet itself) to a number of traders
  • Aggregate the spend so that you per subscription amount can be as low as possible
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Take the best of opensource and the best of SaaS…

Published by Ben Kepes on September 20, 2007 in IT, SaaS and Web x.0. 13 Comments

I read something the other day that discussed whether or not SaaS and OpenSource were in competition. That got me thinking down a tangent and what I want to talk about now is communities.

First a disclaimer - there will be some wild generalisations here but bear with me.

OpenSource tends to build passionate users that consider themselves, to a certain extent “owners” and “developers” of the product in question. These communities tend to be rabidly loyal and have a tendency towards evangelisation.

SaaS on the other hand tends to build networks or communities of individuals that share a commonality - be it use, interest whatever. SaaS users tend to be loyal to a point, but not nearly as loyal as OpenSource-ers.

To a certain extent SaaS enterprises have attempted to create the OpeSource level of community by embracing the concepts of beta-testing and user feedback and development. This however has been reasonably limited (mainly due to the fact that OpenSource is free, at some point a free beta-test of a SaaS product will generally swing over to a subscription based service).

Imagine if you will a situation where a revenue generating SaaS product builds a community of such committed users that they become the salesforce, an integral part of the development team and the PR gang.

Community 2.0?

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SAP BusinessByDesign

Published by Ben Kepes on September 20, 2007 in Business, IT and SaaS. 1 Comment

I’ve had a look at he introductory webcast.

Wow - there’s a whole lot of functionality in there to introduce in one swoop - that’s what having the resources of SAP behind you gives.

The question I guess isn’t whether they can build the product, it’s whether the customers will come, whether the investors will be happy with the changed revenue stream and whether they are too big to move nimbly enough to keep the product moving.

Watch this space!

Update - similar sentiments expressed here at  ZDnet

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