Monthly Archives: November 2009

Over on Accounting Web, a right royal stoush was started when Aqilla’s Hugh Scantlebury wrote an op ed piece opining what the withdrawal of Microsoft’s Office Accounting product means and, more importantly, what is behind the move. For those who need the history, Microsoft discontinued its Office Accounting product line, having determined that;

existing free templates within Office used with Excel [were] a better option for small businesses, and the Microsoft Dynamics ERP products were appropriate for mid-range organizations

It’s an interesting move at a time when micro to small business is a massive proportion of global GDP and at a time when, coming out of a recession, one would imagine an upswing in micro business activity. Given this and the end-of-lifeing of Microsoft money, it’s clear something more has to be going on… more on that another day.

Anyway, Hugh starts of by arguing that the withdrawal of Office Accounting doesn’t mark the end for desktop software – a fact that’s hard to argue given the tend of millions of customers still using products from the main desktop app vendors. Hugh went on however to say that while the move doesn’t indicate a watershed moment, that there is in fact a;

gradual move to web-based or Software-as-a-Service (SaaS) accounting, and that’s set to change the industry

It’s an interesting forum to make such a bold claim – accountants are by nature conservative and he was taking a vision of the future over to their turf. This was made obvious by the first couple of comments on the post which, while dwelling on the negative aspects of this issue, were not without merit;

When my software carries on working even when I lose my connection and then synchronises data and programs on reconnection, then its time has come.

Cloud computing won’t really take off until we see reliable minimum internet speeds nearer 20mbps; good insured service from the software suppliers; guaranteed portability of data from one supplier to the other in the event of service failures and cost efficiencies that they can only dream about at present.

Over on AccMan, Dennis Howlett came out swinging with a critique of Hugh’s thinking concurring with one of the commenters on the original post who says that;

There has been a flood of vendor entrants, simply because it is a whole lot easier to put up a server than it is to go out and grab 1% market share, but the numbers don’t stack up. While the providors of web based systems are really cagey about their user bases it is a simple matter to check it out on Alexa. The traffic on all of them is abysmal.

At face value this is a sound argument. Xero, one of the shining lights of the “new dawn” of SaaS accounting offering had, at it’s latest reporting period, 12000 paying customers. KashFlow has several thousand as well. FreshBooks has several hundred thousand customers but remains very cagey about how many of those actually pay for the service – there are a plethora of other Accounting software vendors for micro businesses – but most of them have customer counts only in triple figures, and many of them in the low triple figures to boot.

These numbers pale in comparison to the “big boys” – Sage, Intuit (disclosure – Intuit is a client) and MYOB who, between them, have around 12 million paying customers. By these metrics alone, SaaS is little more than a rounding error on the scale of things.

But this contention conveniently ignores the fact that all of the traditional vendors are making moves (albeit nascent in some cases) into a cloud-y world. Sage had it’s SageLive offering (admittedly ultimately a failure) and Sage internationally is active with a number of SaaS products. MYOB too had a SaaS offering that was doomed to failure but they’re envisioning a world where the cloud is part of what they do and finally Intuit has the Intuit Partner Platform, a move that arguably gives them the best of both worlds. Clearly there is a general expectation that, whether or not you consider SaaS and the cloud generally revolutionary, there is a shift underway that no one can ignore.

Some define this change as a move to web based software or SaaS, while others see a more hybrid approach that marries some degree of desktop with cloud services but, either way, it’s a slow but inexorable move towards a world that ceases to rely solely on a physical server sitting in someone’s back office or, for that matter, a hard drive on a laptop.. 

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One of my favorite posts was written over two years ago, back when I was still trying to tie down this SaaS thing. In my post I called for an approach by SaaS vendors to recreate parts of the OpenSource ethos in order to build their customer base and even their product. I said in my post;

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.

I was talking recently to a SaaS vendor who is starting to think about how best to build multi-lingual capabilities into his product. It’s a difficult call for this particular startup – they’re self-funded, have the unfortunate situation of having a widely spread geographical base and are limited in terms of available development time. No easy answers or so it would seem.

Enter Zendesk, a great company that I’ve written about many times in the past. Zendesk had this problem a couple of years ago when they were still a small Danish startup (before, that is, the post that allegedly started them on their meteoric growth curve ). As a small company they didn’t have the time or resource to create their own multi lingual capability. What did they do? The built the functionality and then turned to the customers to populate the actual language data. I talked to CEO Mikkel Svane who commented that;

Within just a few weeks of releasing the Zendesk internationalization tool we had support for more than 25 languages, and hundreds of customers had already enabled the new languages on their support portals. We see this as a trend that clearly shows companies are amenable to living with minor inaccuracies in favor of agility and speed

But here’s where it gets interested – Zendesk didn’t have to invest hundreds of developer hours or thousands of dollars to do this – they merely went out to their existing userbase, and the wider social media community and asked people if they were keen to help. The image above shows just how many foreign language speakers are happy to share their knowledge – and all for the simply price of an (admittedly very cool) Zendesk t-shirt.

It’s yet another reminder of the value of the community, letting your userbase feel some sort of ownership and, quite simply, reaching out. So there ya go Dave, there’s an opportunity for you to do similarly.

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Big news for the Kiwis out there – Microsoft CFO Chris Liddell is leaving the company at the end of the year. The Microsoft position was a bit of a coup for New Zealand, one of our own filling a high profile role for a (very) high profile company.

Liddell himself seems upbeat, saying that;

My time at Microsoft has been an outstanding experience, and I am delighted to be leaving the company in such great shape, we have built a world-class finance team and established strong internal accountability. Microsoft is coming out of the economic downturn with not only great product momentum but also strong discipline around costs and a focus on driving shareholder value.

Microsoft CEO Steve Ballmer was muted in his comments saying that;

Chris and his finance team have accomplished a great deal over the past four and a half years, the team is deep and strong, and has an excellent record of building value for our shareholders

It reads to me like Liddell is seeing the pain MS will face in the next year or two as it transitions from it’s traditional cash cow product mix to a different one. That transition is going to be corrosive to their revenue streams and share price and he’s no doubt looking at what that will do to his career path.

It’ll be intensely interesting to see where Liddell ends up next. Apparently he is;

looking at expanding beyond being a CFO – He’s looking at CEO gigs and the private equity space

Watch this space.

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My good friend and buzzword slayer Mike Riversdale, is in the habit of slaying the dragons of enterprise newspeak. He regularly bemoans organizations whose collaboration strategy is articulated (somewhat facetiously) by the title above – you know, the organization who pay lip service to collaboration and fully believe that it’s a technical issue rather than a cultural one.

It’s an issue I come to time and time again in two distinct fields – collaboration and social media.

In the social media space it generally rears its head in the form of a large business that wants to “do” social media – either because they see it happening in other business and want to play with the cool kids or (and sadly more often) because some “expert” preaches to them the need for social media (see the Social media Guru video below);

Generally these sorts of organization may implement the social media initiatives, but somehow forget the importance of enabling the initiatives through an organizational cultural shift.

At the recent Enterprise 2.0 conference in San Francisco, Bevin Hernandez from Penn State University gave a presentation looking at the success they’ve had rolling out ThoughtFarmer as a collaborative platform. She shared a cool video that showed some of the same issues, but in the collaboration area;

NEO from Bevin Hernandez on Vimeo.

It’s something my friends who practice in the Enterprise 2.0 space come up against time and time again – but we’re our own worst enemies. I walked the expo floor at Enterprise 2.0 and was depressed to overhear the conversations going on in the booths – everyone is declaring themselves a collaboration platform, focusing on the whiz-bang technology and forgetting all the things that actually matter – culture shift, migration easing, barriers to adoption.

It was discussed in the back channels at Enterprise 2.0 ad nauseum, the need to move away from technology and really find the value, look at the culture and ease the transition.

So yeah, collaboration huh, make mine a double… with cream

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I’ve posted many times before about traditional PR and how it falls dismally short. This post is an opportunity to celebrate some success stories and tell a few sorry tales.

Before the recent Enterprise 2.0 conference in San Francisco, and in an attempt to make my time as efficient as possible, I posted an invitation to PR staffers with some guidelines about how best to connect with me.

So here’s some bouquets out to some stellar performers;

Kate Hobbie – MediaBrew consulting and Aria Systems. Kate is kind of a token offering here. We were already friends from previous connections when she’d spent time talking to me about SaaS billing in her communication role with Aria so there was some context there. However Kate went out of her way, even picking me up from the airport and playing taxi service for me.

Rachel Peterson – Nectar communications. Rachel I’d also met previously when talking to Zuora and Sliderocket, two companies she works with. Despite not actually meeting up with Rachel this trip, she went out of her way to facilitate things for me, even arranging for me to meet Sliderocket CEO, Chuck Dietrich for a great run on the Presidio

Alison Mickey – Schwartz communications. Alison saw my post and REALLY went out of her way to understand what I’m about. She sent me an email that referenced my area of interest in blogging, and even showed that she’d done some research about my outside interests and hobbies. The briefings she arranged were well resourced and I had enough information before them to make the briefing time valuable.

Julia Mak – Community manager at LeapFILE. Julia also reached out to talk with me. Her company were originally going to demo at Enterprise 2.0 but for various reasons did not. We still met up and had a good chat about where her company is going, and the chat was tailored to my particular areas of interest.

Christie Denniston at Catapult PR. Christie works with ThoughtWorks studios who were demo-ing their Google Wave integration at Enterprise 2.0. Despite being remote from the conference, Christie went out of her way to ensure I had everything I needed, as an aside it was pretty disappointing that despite her staunch efforts, the team from ThoughtWorks never delivered the resource they had promised for my post – you can’t pick your clients huh?

So there you go – anyone needing some awesome PR/communications people would do well to talk to Kate, Rachel, Alison, Julia or Christie – if you’re interested just drop me a line and I’ll make the connections.

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I’ve written before about Apprenda, a company I’ve followed since I started blogging. Their company blog (sadly somewhat silent of late) was one of the early places for vendor thought-leadership around PaaS in particular.

I was stoked to hear from CEO and co-founder Sinclair Schuller the other day that Apprenda had just secured a $5 million investment round led by New Enterprise Associates, the same company that has invested in Salesforce.com, WebEx, Juniper Networks and XenSource. I spoke with Jesse Kliza, business development guy for Apprenda to see what it means for the company.

I put it to Jesse that, given our previous discussion around the traction they were seeing for their private software delivery cloud offerings, that this was a real endorsement for the private model and a tacit admission that a major growth area going forwards will be in the enablement of enterprises moving their software to SaaS, but behind the firewall. Jesse agreed and referenced a quote from Tom Grossi, Principal at funder NEA; “We believe SaaSGrid addresses a tremendous need in the market, enabling the efficient deployment of SaaS offerings and private software delivery clouds”.

Jesse and I discussed the careful messaging job that needs to occur here. As noted previously, Apprenda has moved form it’s previous habit of describing itself as a PaaS provider – it doesn’t want to be labeled as a vendor who just “enables building a simple application with no code”. That’s not what SaaS grid is about and so they’re beginning to message the added value that SaaS grid brings, architectural, scalability, baked in multi-tenancy and the like.

The funding will be used to keep building the team – both development staff but also sales and marketing positions. Jesse was pleased to report that Apprenda’s customer traction was so great this past year that the funding round was not a necessity – the money however will allow them to scale the business more rapidly than through organic means.

It’s a great endorsement for both Apprenda in particular and the more general “private SaaS” market. While the dogmatic types among us cringe at the thought of private SaaS – there’s a huge demand for it that Apprenda is hoping to satisfy.

While I was talking to the Apprenda team, we started talking about cloud interoperability and portability. In particular we discussed in relation to a recent post of mine where I discussed the contention that some people make that cloud computing will spell the end for the traditional SaaS players. Interestingly enough Isaac Garcia, CEO of Central Desktop took the opposing view, saying that;

At Central Desktop we run on our own private multi-tenant SaaS platform. Essentially, our private cloud. Over the years, we’ve continued to evaluate Clouds as an option for delivering point services to our customers – but the economics havn’t (sic) justified a switch. What is often overlooked by SaaS pundits is the fact that connecting to a Cloud very often reduces (sometimes eliminates) key features that a private SaaS vendor can provide.

Jesse from Apprenda pointed out that the “traditional” SaaS players begin to fail. They generally run in only the vendor’s data centers, not across public and private clouds and as such they are unable to take advantage of cloud computing.

SaaSGrid on the other hand finds a real “best of both worlds” approach to all of this. They allow companies to leverage any compute resources whether they be private (internal data centers, etc) or public (EC2, RackSpace, etc) and creates a single software delivery fabric out of them.  A use case Jesse gave was with a company writing custom routing strategies to, for example, “send all of X applications services to the cheapest provider”, or “send all of Y applications services to only our internal resources”.  That’s a pretty powerful offering but there are advantages beyond specificity with routing. Because SaaSGrid is resilient, it can route services wherever based on availability and the custom routing strategies defined – a great failover mechanism.

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