Tag Archive for 'nzwc'

Where incumbents go wrong

Published by The Unreasonablemen on May 5, 2008 in Business. 0 Comments

A guest post from the unreasonablemen.net

I saw this from Ovum analysing SAP’s Q1 financials. There are a couple of take outs from this that really struck me with respect to SaaS and incumbent business models.

1) The company is still growing its core business (double digit growth no less)
2) The SME product group is going gang busters 18% growth
3) Their SaaS offering is not performing (now there’s a surprise!)
4)They are going to address this by only focusing on selling SaaS (wait for it…) into those markets where they have been successful selling on premises… uh oh!

Lets break this down a bit.
1) SAP are selling a heap of core enterprise apps, solutions (services) and mid market core apps.

From the aggressive growth you would have to postulate that the focus of the company is on … core stuff with big numbers. That’s like heroine. Try to stop using that and you are going to have withdrawals…stock market, staff and customers…

2) They’ve decided to “…focus for the remainder of 2008 on Germany, the US, France, the UK and China, where most of its existing customers are located” and “…reduce its “accelerated investments” in Business By Design this year by about €100m - a decision prompted by the slow uptake”

Basically selling SaaS into those very markets (and companies) where they’ve already sold on premises solutions to, but with a ‘lesser’ product. This is a multi faceted strategic faux pas, and they aren’t alone is doing this.

This whole situation reminds me of a conversation I had with a leading SaaS CRM vendor. My contact had actually set up a meeting with Seibel in an effort to coach them on how to be more successful. He’d done this because their performance in the SaaS space was so woeful it was (in his opinion) damaging the growth of the SaaS market.

The key issue, they were targeting their existing enterprise customers with their SaaS offering, BUT only when they have failed to sell the on-premises version. To put this in context, Seibel’s sales approach is to approach their existing customers (who they’ve convinced to buy expensive on premises stuff), try and sell them more expensive on premises stuff, and when they lose the deal say …”well we’ve got this SaaS thing that’s cheap”… nice!

So what are the problems with this approach?

1)You are damaging your brand. If like SAP you are the king of the heap in a market, known for a certain thing, why risk damaging this with a competitive offering?
2)The way you sell this is different. SaaS isn’t the cheap and cheerful part solution, it’s a fully functional alternative that has its own value proposition that needs to be properly articulated in order to be successful
3Saleforce skills and rem. The only way to change this is to change the way your sales teams sell and are rewarded. They sell what you pay them to sell!
4) Sharemarket. The sharemarket isn’t exactly enamoured with the idea of you tanking your cash cow revenue stream. They dislike that only marginally more than large investments in new technology that fail and essentially eat into their payouts. No way are they going to support you doing this long term unless you can show it’s a stonking success. Neither Seibel nor SAP have done that.

In years to come, do you think students will read case studies on how not to embrace a disruptive technology that include SAP, Seibel or Microsoft?

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A grand vision…

Published by The Unreasonablemen on March 18, 2008 in Business, Cleantech, Economic Development, Society and Strategy. 1 Comment

This isn’t my normal topic, but I can’t resist. I’ve secretly always harbored a dream that NZ might really make something of itself. Do what Germany & Japan did post WWII & Ireland have done recently & recreate their economies. To me, the easiest way to do this was to remove our dependency on the outside world for products. My reasoning? It just seems quite similar to any addiction, at some stage, if you are going to get ahead you have to break the habit.

So I was quite enamoured by the NZ herald article that states

that New Zealand was one of just a handful of places identified worldwide that was well placed to become carbon-neutral for transport, given advances in biofuel technology…..New Zealand could be a world leader in the field and was already getting international attention because it could be self-sufficient given the ratio of vehicles to land available.

Fantastic, love the grand vision, why not!…Then I thought about it, and then I found some problems with this approach.

  1. we need a government who has the long term interests of the nation at heart, not the next re-election, this is after all a 40 year plan!!
  2. If we are the only country that can do this doesn’t that mean other more powerful / innovative countries will solve the oil / transportation issue in their own way & we end up with an orphan technology? (Cuba anyone?)
  3. 25 yrs @ $ 2-3 billion a year…. To be honest if we couldn’t invent something better technically, sooner and with a better NPV return and that didn’t rely on combustion to create energy with $100 -150 billion then we should be shot.

I do applaud the vision though is sincerely hope that one little nation can, & will be a leader in alternate energies for our planets sake as well as for our economy.

So, if we were serious about this kind of nationwide transformation, and we had loads of cash, what do you folks think NZ could do? What is your grand vision?

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This one’s straight from the “what the..” category

Published by The Unreasonablemen on March 13, 2008 in Business. 7 Comments

From computerworld this morning

Telecom chief executive Paul Reynolds has joined the board of XConnect Global Networks, which provides VoIP and IP-based services

From the Xconnect website

XConnect’s award winning services enable over 400 VoIP service providers and carriers worldwide to peer with millions of VoIP endpoints.

Am I alone in thinking that this is way up the bizarre scale? Telecom’s stance around fast broad band, VoIP Trunking and even VoIP solutions has been to treat it like something distasteful stuck to the bottom of your shoe, and their new CEO does this????

Disclosure - Diversity Limited is a consultant to Telecom New Zealand and its subsidiaries.

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Is the collaboration war just Google v Microsoft?

Published by The Unreasonablemen on March 10, 2008 in SaaS. 0 Comments

This is a mirror post of my own blog unreasonablemen.net

Pop quiz.

Who is the second largest software company in the world?

Who is the second largest provider of on-premise email & collaboration software?

 

The answer to both is IBM. The interesting thing about IBM is that they have been virtually anonymous on the SaaS front. Up until now that is.

 I recently attended a seminar co-hosted by IBM & Saugatuck on SaaS. For the most part this was a bit of a disappointment (I’ll describe the IBM play in more detail below). The most interesting thing was the declaration of IBM’s own SaaS plans code named ‘bluehouse’. Interestingly this isn’t top secret, IBM has told the world all about it, it just hasn’t been picked up.

 

Collaboration services delivered on the Web
“Bluehouse” is the code name for a future software as a service offering from IBM designed for companies with five to 500 employees. “Bluehouse” extends the value of the Lotus Foundations family by providing extranet collaboration services for open social networking, instant messaging, file sharing, project management and web conferencing.

The suite outlined by IBM is very comprehensive, much more impressive than MS’s somewhat disappointing announcement of last week & includes email, unified Comms, document shaving, social network applications, video collaboration & a bit more.

Various aspects of blue house are very interesting. Firstly in a SaaS world the barriers that notes has in getting into an entrenched MS go away. Secondly brand value means that to many corporates this is a credible alternative Thirdly IBM hasn’t really got a lot to loose. This article (which is 3 yrs old) claims notes had 23% market share (which just feels way too high). The point is IBM is loosing the email race. But now with SaaS they could tank the price of email etc & get back in the game in fairly short order. Fascinating play that should definite spice up the email wars.

As an interesting aside. Go to the Software top 100 site & type in Google…. What does that tell you???

 

More on the IBM SaaS model.

 IBM appear to have done the math & realised that SaaS is actually quite threatening to their core hardware & software business. The rationale? In a SaaS world the ISV builds their ‘stack’ only once & will likely never move. That is the buying decision for H/W & S/W is centralised & baked in. So vendors like themselves miss out on all the business on-prem software drive & if they don’t get the ISV on their platforms ( DB2 , websphere , hardware etc) at initiation there’s no way back in.

So IBM’s play is to get to the SaaS vendors at start-up. Kinda boring but pretty real I guess.

 

 

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