NetSuite (NYSE: N), which offers integrated business-management suites in software as a service (SaaS) (define) form to small and medium-size businesses, has unveiled upgrades to its CRM+ customer relationship management CRM (define) product and NS-BOS platform-as-a-service offerings. These product refreshes focus around customer service and marketing automation.
The AJAX-based (define) CRM+ upgrades expand knowledge management, and customer service and support capabilities. The NS-BOS upgrades provide more support for JavaScript and the World Wide Web Consortium's (W3C) SOAP (define) protocol. NetSuite has also announced support for the Firefox 3 browser.
NetSuite goes head to head with some of the biggest players in the fields it covers. On the CRM side, Salesforce.com (NYSE: CRM) and Oracle's Siebel CRM OnDemand are its main competitors.
NetSuite's product updates follow its June acquisition of automated professional services software provider OpenAir for $26 million. Observers say the software vendor is expanding its portfolio of enterprise services with these moves.
The company is constantly adding "good solid enterprise functionality," Paul Greenberg, an analyst at the 56 Group and executive vice president of the National CRM Association, told InternetNews.com.
For example, NetSuite added globalization functionality in June, which lets users handle multiple currencies and languages. This feature requires only a single dashboard, "so even if you had multiple offices in multiple countries using multiple currencies in multiple languages you'd have a single global view," Greenberg said.
"Even though they're in the SaaS space, they're probably closer to SAP (NYSE: SAP) than any other vendor," Greenberg said. "They resemble SAP, although they don't have supply-chain functionality like SAP does."
NetSuite, which is 54 percent owned by Oracle (NASDAQ: ORCL) CEO Larry Ellison and went public in December, has human resources and mobile capabilities, but isn't strong in either, according to Greenberg, who notes that the company is strong in financials, where it began, and in CRM.
The OpenAir purchase adds applications ranging from expense reports to workflow and resource management capabilities to NetSuite's products. "They still have a credible claim to being the only vendor in the space that has ERP and CRM and e-commerce built together from the ground up and offered on demand," Denis Pombriant, an analyst at Beagle Research, told InternetNews.com.
"I don't think anyone has more experience in a front and back office on-demand integrated suite than they do now," he added.
Mini Peiris, NetSuite's vice president of product marketing, said the company's offerings cover "all core business process, from the first touch on a Web site through CRM, customer service, order management and catalogs and financing, to ERP, to warehouse management, financial reporting and e-commerce."
NetSuite's NS-BOS is similar to Force.com but is aimed at encouraging "people who have vertical expertise or complementary products to be part of our system," Peiris said.
"It doesn't matter if you write an application for using our code, we've always been very standards-based and open, our API set is JavaScript based, and the integration points are still Web services." An API (define) is an application programming interface.
The overall NetSuite product competes with ERP and e-commerce vendors. "You have to factor in SAP, Great Plains out of the Microsoft suite with its inventory management features, as well as pure-play e-commerce players such as DemandWare," she said. Established in 2004, DemandWare offers e-commerce on demand.
SAP's Business by Design product has "been quite helpful to us because they're pushing the SaaS Suite message, which we've been doing for five years now," Peiris said. "We can deliver products now whereas their timeline is 12 to 18 months away." Business By Design is an on-demand enterprise project delivered in SaaS form, and is ramping up with its first wave of customers.
Source:internetnews.com
Thursday, July 24, 2008
Wednesday, July 16, 2008
CRM vendors line up for iPhone 3G; so do hacked-off customers
By Stuart Lauchlan, news and analysis editor
It might have been a PR nightmare for Apple and a customer management faux pas for O2, but the launch of the iPhone 3G attracted two leading business applications vendors onto the platform.
In March, Apple announced the release of a software development kit (SDK) for the iPhone that let developers create applications for that handheld device. Downloads of the SDK totaled more than 100,000 a week later.
Oracle released the first in a series of free front-end business applications that will let iPhone users connect to business intelligence data on application servers back at headquarters, while Salesforce.com announced that Force.com Platform-as-a-Service and its CRM service are available as Salesforce mobile applications that will be distributed through the Apple Apps Store which comes bundled with the new version of the phone.
The first Oracle application on the iPhone is Oracle Business Indicators, which allows iPhone users to access a variety of business reports, such as financial trends, sales performance results or customer satisfaction surveys, stored on application servers back at headquarters. Oracle Business Intelligence Enterprise Edition Plus and Oracle Business Intelligence Applications, Fusion Edition, can both be downloaded for free at the Apple App Store.
The Oracle applications provide access to key metrics and analytical data, and run natively on the iPhone. They support SSL encryption for security, always a concern when enterprise data is transmitted, especially over wireless connections, which are not considered especially secure.
CRM and ERP applications are set to follow. "Today's business executives and mangers are highly mobile, and their information needs are too," said Ed Abbo, Oracle's senior vice president of application development. "We're excited to build out applications on the iPhone platform to support these highly mobile customers."
Setting the pace
Salesforce Mobile for iPhone integrates with the iPhone's native functions such as email, maps and phone capabilities. Users can navigate through key customer records, initiate phone calls and emails from within Salesforce CRM, and query this application for customer information, which will be sent to their iPhones. Users will also be able to call from customer information from the Salesforce.com servers and display it on their iPhones, allowing them to navigate through customer accounts, contacts and sales opportunities.
"Salesforce.com is committed to dramatically expanding the potential for mobile applications in the enterprise," said Chuck Dietrich, vice president of Salesforce Mobile, Salesforce.com. "The amazing iPhone interface, Salesforce CRM and the Force.com platform are a great combination that gives enterprises a new suite of mobile business applications delivered when and where their users need them. The iPhone brings a touch base interface, which opens up a lot of opportunities to make these applications more adaptable.
"The iPhone has set the pace for what that interface would be, so we can have our applications emulate that form factor. Our customers use the applications we make, and they re-customise and build their own. The iPhone client respects whatever you build online, and it opens up the possibility to build entire suites of customised applications.”
The first version of the iPhone attracted the attention of NetSuite, which offered its users full access via the iPhone's Safari web browser enabling them to create new orders, new contacts and new opportunities, and can also access all product pricing and customer information. NetSuite to date has not announced plans for a native iPhone version.
Other companies have also launched iPhone applications aimed at business users, such as British Airways. The BA app allows frequent flyers to view the BA timetable, get real-time travel arrival and departure info and book flights. "The iPhone is revolutionising mobile communications and allows us to provide instant access to arrivals and departures information which will enhance the experience of travelling with BA,” said BA CIO Paul Coby. "We're always seeking to improve the service our customers enjoy by the smart use of innovative technology and the iPhone is a fantastic way to achieve this."
The launch of the iPhone has been something of a customer management nightmare for Apple. Activation problems prevented new iPhone users from using their phones, rendered old iPhone unusable, and served up error messages to iPod Touch owners. But Apple's problems were not tied exclusively to the iPhone activations. It is also facing criticism for technical problems with its online storage and syncing service called MobileMe which launched at the same time.
Demand for iPhones was so strong on launch day that the phone activation servers at iTunes couldn't cope, causing untold customers to wait for hours to get their device working. Prior to this, UK customers of O2 were unable to place upgrade orders for the new phone via the company's website after its servers also fell over under the weight of demand. Activation of orders within O2 stores was also proving difficult, made more embarrassing by the revelation that web activation required the use of Microsoft's Internet Explorer browser.
In London, police officers assisted Apple staff to close the the Regent Street Apple Store in the middle of the afternoon when customers were told that it would take at least three hours to buy an iPhone.
Source:mycustomer.com
It might have been a PR nightmare for Apple and a customer management faux pas for O2, but the launch of the iPhone 3G attracted two leading business applications vendors onto the platform.
In March, Apple announced the release of a software development kit (SDK) for the iPhone that let developers create applications for that handheld device. Downloads of the SDK totaled more than 100,000 a week later.
Oracle released the first in a series of free front-end business applications that will let iPhone users connect to business intelligence data on application servers back at headquarters, while Salesforce.com announced that Force.com Platform-as-a-Service and its CRM service are available as Salesforce mobile applications that will be distributed through the Apple Apps Store which comes bundled with the new version of the phone.
The first Oracle application on the iPhone is Oracle Business Indicators, which allows iPhone users to access a variety of business reports, such as financial trends, sales performance results or customer satisfaction surveys, stored on application servers back at headquarters. Oracle Business Intelligence Enterprise Edition Plus and Oracle Business Intelligence Applications, Fusion Edition, can both be downloaded for free at the Apple App Store.
The Oracle applications provide access to key metrics and analytical data, and run natively on the iPhone. They support SSL encryption for security, always a concern when enterprise data is transmitted, especially over wireless connections, which are not considered especially secure.
CRM and ERP applications are set to follow. "Today's business executives and mangers are highly mobile, and their information needs are too," said Ed Abbo, Oracle's senior vice president of application development. "We're excited to build out applications on the iPhone platform to support these highly mobile customers."
Setting the pace
Salesforce Mobile for iPhone integrates with the iPhone's native functions such as email, maps and phone capabilities. Users can navigate through key customer records, initiate phone calls and emails from within Salesforce CRM, and query this application for customer information, which will be sent to their iPhones. Users will also be able to call from customer information from the Salesforce.com servers and display it on their iPhones, allowing them to navigate through customer accounts, contacts and sales opportunities.
"Salesforce.com is committed to dramatically expanding the potential for mobile applications in the enterprise," said Chuck Dietrich, vice president of Salesforce Mobile, Salesforce.com. "The amazing iPhone interface, Salesforce CRM and the Force.com platform are a great combination that gives enterprises a new suite of mobile business applications delivered when and where their users need them. The iPhone brings a touch base interface, which opens up a lot of opportunities to make these applications more adaptable.
"The iPhone has set the pace for what that interface would be, so we can have our applications emulate that form factor. Our customers use the applications we make, and they re-customise and build their own. The iPhone client respects whatever you build online, and it opens up the possibility to build entire suites of customised applications.”
The first version of the iPhone attracted the attention of NetSuite, which offered its users full access via the iPhone's Safari web browser enabling them to create new orders, new contacts and new opportunities, and can also access all product pricing and customer information. NetSuite to date has not announced plans for a native iPhone version.
Other companies have also launched iPhone applications aimed at business users, such as British Airways. The BA app allows frequent flyers to view the BA timetable, get real-time travel arrival and departure info and book flights. "The iPhone is revolutionising mobile communications and allows us to provide instant access to arrivals and departures information which will enhance the experience of travelling with BA,” said BA CIO Paul Coby. "We're always seeking to improve the service our customers enjoy by the smart use of innovative technology and the iPhone is a fantastic way to achieve this."
The launch of the iPhone has been something of a customer management nightmare for Apple. Activation problems prevented new iPhone users from using their phones, rendered old iPhone unusable, and served up error messages to iPod Touch owners. But Apple's problems were not tied exclusively to the iPhone activations. It is also facing criticism for technical problems with its online storage and syncing service called MobileMe which launched at the same time.
Demand for iPhones was so strong on launch day that the phone activation servers at iTunes couldn't cope, causing untold customers to wait for hours to get their device working. Prior to this, UK customers of O2 were unable to place upgrade orders for the new phone via the company's website after its servers also fell over under the weight of demand. Activation of orders within O2 stores was also proving difficult, made more embarrassing by the revelation that web activation required the use of Microsoft's Internet Explorer browser.
In London, police officers assisted Apple staff to close the the Regent Street Apple Store in the middle of the afternoon when customers were told that it would take at least three hours to buy an iPhone.
Source:mycustomer.com
Tuesday, July 15, 2008
Microsoft Plugs Dynamics, Cloud Services
Microsoft gave its CRM products a great deal of attention at its Worldwide Partner Conference last week. The company also heavily focused on SharePoint and cloud computing -- which it is increasing focus on -- during the event.
Microsoft (Nasdaq: MSFT) Free Trial. Security Software As A Service From Webroot. Latest News about Microsoft held its Worldwide Partner Conference last week, and Sonoma Partners' Mike Snyder summed up the event's highlights.
"Once again, Microsoft CRM Improve customer service and productivity with Avaya Unified Communications. was a featured product at the conference! Microsoft sells thousands of products, but CRM gets plenty of attention," he wrote. "During the opening keynote on Tuesday, there was just one product demo: Microsoft CRM (conducted by Brad Wilson).
"There are now 14,000 customers and 775,000 users worldwide; Microsoft added 4,000 customers and 225,000 users in FY08; there are 500 Microsoft Dynamics CRM Online customers," Snyder noted.
Solution Accelerators
Snyder also blogged about some forthcoming "Solution Accelerators" Microsoft will be releasing for Microsoft CRM. There are eight altogether -- two of which Sonoma helped to develop, notably the customer service portal and event management ones.
The Solution Accelerators are basically add-ons to Microsoft Dynamics CRM 4.0. The customer portal in particular, he told CRM Buyer, will be popular with customers when it comes out later this year. "I would say 90 percent of the time I meet with prospective clients, they tell me that self-service is becoming increasingly important to their operations."
Currently, a few third-party companies offer this functionality to be integrated into the Microsoft product, he continued. "But up until this, [it] hasn't been offered as part of the Microsoft functionality, so it is very exciting."
Also, Snyder added, all the accelerators will be released with their source code, so the partners can expand on the products.
Microsoft CRM also shared the stage with SharePoint, Snyder concluded in his post, as well as cloud computing, which the company is increasing focus on.
About the former: SharePoint has become a US$1 billion dollar business by itself, he noted. Compare that with all of the Dynamics products combined, which just surpassed $1 billion dollars collectively in the past few years.
Taking Partners Into the Cloud
As for the latter, Snyder as well as other bloggers and news outlets reported on the rollout of Microsoft Online Services, a cloud-based offering of some of its most popular products and services.
"Every keynote session talked about cloud services and their importance for Microsoft," Snyder wrote. "In the past, the tone of the software-as-a-service topic was more like 'well, as a partner you should consider this because some customers want it,' while this year the tone was 'this is an unstoppable train, so you better prepare yourself to get onboard quickly.'"
TechCrunchIT Coeditor Nik Cubrilovic commented on the new program and services as well. He pointed out that they "compete directly with existing partners that offer hosted exchange and sharepoint, as well as the free offerings from Google and others."
That is why Microsoft used the conference to also announce the affiliate and partner program as part of the online platform, he explained. "Partners who refer customers to the online services platform will earn a 12 percent commission on the first year of revenues, and from then on a 6 percent commission on all revenues from that customer. At 12 percent of $180 per year, it is more than a partner earns on the resale of a standard CAL (client access license) for Exchange and Sharepoint, so the hope that with a solid revenue-sharing model, partners will drive growth in adoption of the new online model."
Microsoft seems to be striking just the right balance between not alienating its customers and going after one of the hottest trends in IT right now with its inducements to partners to bring more clients into the cloud fold.
"The partner model for the online services platform seems just as, if not more, appealing than existing partnership agreements with software licensing," Cubrilovic wrote.
Measure This
On Virtual Impax, Kathy Hendershot-Hurd questions whether readers measure customer service by satisfaction or complaints. At the end of her post, she offers links to industry metrics that best measure customer service quality:
* "Customer Attrition Ratio - ... The higher the ratio, the less likely it is that your company is consistently delivering quality customer service.
* "Sales Growth - Your reputation precedes you. If people are still buying from you, and referring others, chances are they are happy with the service and they are loyal to your organization.
* "Customer Survey Results - Directly asking customers to rate the service level they receive is by far the best way to measure service quality.
* "Customer Complaints - Be thankful for each complaint that comes to your attention. You can only provide a thoughtful response to customer issues once you are made aware of the issue. When customers complain, they represent not just their issue, but perhaps an issue that is affecting others."
Meanwhile, Paul Greenberg has released excerpts of his soon-to-be-published CRM at the Speed of Light, 4th Edition. In true Web 2.0 custom, commenters and collaborators are welcome.
Source:crmbuyer.com
Microsoft (Nasdaq: MSFT) Free Trial. Security Software As A Service From Webroot. Latest News about Microsoft held its Worldwide Partner Conference last week, and Sonoma Partners' Mike Snyder summed up the event's highlights.
"Once again, Microsoft CRM Improve customer service and productivity with Avaya Unified Communications. was a featured product at the conference! Microsoft sells thousands of products, but CRM gets plenty of attention," he wrote. "During the opening keynote on Tuesday, there was just one product demo: Microsoft CRM (conducted by Brad Wilson).
"There are now 14,000 customers and 775,000 users worldwide; Microsoft added 4,000 customers and 225,000 users in FY08; there are 500 Microsoft Dynamics CRM Online customers," Snyder noted.
Solution Accelerators
Snyder also blogged about some forthcoming "Solution Accelerators" Microsoft will be releasing for Microsoft CRM. There are eight altogether -- two of which Sonoma helped to develop, notably the customer service portal and event management ones.
The Solution Accelerators are basically add-ons to Microsoft Dynamics CRM 4.0. The customer portal in particular, he told CRM Buyer, will be popular with customers when it comes out later this year. "I would say 90 percent of the time I meet with prospective clients, they tell me that self-service is becoming increasingly important to their operations."
Currently, a few third-party companies offer this functionality to be integrated into the Microsoft product, he continued. "But up until this, [it] hasn't been offered as part of the Microsoft functionality, so it is very exciting."
Also, Snyder added, all the accelerators will be released with their source code, so the partners can expand on the products.
Microsoft CRM also shared the stage with SharePoint, Snyder concluded in his post, as well as cloud computing, which the company is increasing focus on.
About the former: SharePoint has become a US$1 billion dollar business by itself, he noted. Compare that with all of the Dynamics products combined, which just surpassed $1 billion dollars collectively in the past few years.
Taking Partners Into the Cloud
As for the latter, Snyder as well as other bloggers and news outlets reported on the rollout of Microsoft Online Services, a cloud-based offering of some of its most popular products and services.
"Every keynote session talked about cloud services and their importance for Microsoft," Snyder wrote. "In the past, the tone of the software-as-a-service topic was more like 'well, as a partner you should consider this because some customers want it,' while this year the tone was 'this is an unstoppable train, so you better prepare yourself to get onboard quickly.'"
TechCrunchIT Coeditor Nik Cubrilovic commented on the new program and services as well. He pointed out that they "compete directly with existing partners that offer hosted exchange and sharepoint, as well as the free offerings from Google and others."
That is why Microsoft used the conference to also announce the affiliate and partner program as part of the online platform, he explained. "Partners who refer customers to the online services platform will earn a 12 percent commission on the first year of revenues, and from then on a 6 percent commission on all revenues from that customer. At 12 percent of $180 per year, it is more than a partner earns on the resale of a standard CAL (client access license) for Exchange and Sharepoint, so the hope that with a solid revenue-sharing model, partners will drive growth in adoption of the new online model."
Microsoft seems to be striking just the right balance between not alienating its customers and going after one of the hottest trends in IT right now with its inducements to partners to bring more clients into the cloud fold.
"The partner model for the online services platform seems just as, if not more, appealing than existing partnership agreements with software licensing," Cubrilovic wrote.
Measure This
On Virtual Impax, Kathy Hendershot-Hurd questions whether readers measure customer service by satisfaction or complaints. At the end of her post, she offers links to industry metrics that best measure customer service quality:
* "Customer Attrition Ratio - ... The higher the ratio, the less likely it is that your company is consistently delivering quality customer service.
* "Sales Growth - Your reputation precedes you. If people are still buying from you, and referring others, chances are they are happy with the service and they are loyal to your organization.
* "Customer Survey Results - Directly asking customers to rate the service level they receive is by far the best way to measure service quality.
* "Customer Complaints - Be thankful for each complaint that comes to your attention. You can only provide a thoughtful response to customer issues once you are made aware of the issue. When customers complain, they represent not just their issue, but perhaps an issue that is affecting others."
Meanwhile, Paul Greenberg has released excerpts of his soon-to-be-published CRM at the Speed of Light, 4th Edition. In true Web 2.0 custom, commenters and collaborators are welcome.
Source:crmbuyer.com
Can you really live without Microsoft Office?
If there's one application that everybody has, and depends on, it's Microsoft Office. The newest Office, though, has met with a mixed reaction, thanks to a changed user interface that caused concern in some quarters and increased connections with Microsoft's collaboration technology that has intrigued many in IT -- but is optimized for Vista environments that have been slow to gain adoption.
At the same time, more people are adopting Apple's Macintosh, where the newest Office incarnation has been roundly criticized for being just a partial implementation of the real thing. And the desktop Linux community is hoping that the emerging class of ultra-low-cost PCs and laptops may jump-start adoption -- and a need for Linux-based office productivity software. Thus, the time is right to see if you can live without Microsoft Office.
[ Read InfoWorld's comparative review of Google Docs, Lotus Symphony, OpenOffice, and Zoho, or view the "Office killers" slide show. | If you're looking to dump both Office and Windows, find out whether you can really switch to Mac OS X or convert to desktop Linux. ]
In the early days of the PC, Microsoft Office faced several vibrant competitors, but today, only a puny WordPerfect survives as a commercial product, and barely that. Mac users have the option of Apple's iWork suite, which works well for basic tasks but is oriented more toward visual document preparation than large-enterprise workflow.
But a new generation of competitors -- Google Docs, IBM Lotus Symphony, OpenOffice.org, and Zoho -- is emerging from two different directions: cloud computing services and open source software. While businesses have embraced SaaS (software as a service) for enterprise applications from CRM to security, and open source software for server operating systems and infrastructure component firmware, they have been far more reluctant to move desktop productivity software to either open source or the cloud. Still, the feature sets and user interfaces of the competition have developed to a point at which they can be considered serious options for personal productivity tasks.
So it's plausible to switch to an Office alternative. But how do you go about actually making the switch? There are several factors to work through, since technology is far from the only issue that has to be considered when thinking about a shift from a market leader to less-popular competitor. And each can have a cost.
The cost of training
Businesses considering alternatives to Office of course have to anticipate a steep cost of change. One of the great advantages of Microsoft Office is the number of people who know how to use its applications. In any switch to an alternative, you would likely need to do a good bit of training -- especially of heavy Excel users who tap into the significant and sometimes inherently complex functionality in that product. And don't forget the cost of rewriting all the Excel macros that create the monthly executive dashboard reporting at the company.
At the same time, more people are adopting Apple's Macintosh, where the newest Office incarnation has been roundly criticized for being just a partial implementation of the real thing. And the desktop Linux community is hoping that the emerging class of ultra-low-cost PCs and laptops may jump-start adoption -- and a need for Linux-based office productivity software. Thus, the time is right to see if you can live without Microsoft Office.
[ Read InfoWorld's comparative review of Google Docs, Lotus Symphony, OpenOffice, and Zoho, or view the "Office killers" slide show. | If you're looking to dump both Office and Windows, find out whether you can really switch to Mac OS X or convert to desktop Linux. ]
In the early days of the PC, Microsoft Office faced several vibrant competitors, but today, only a puny WordPerfect survives as a commercial product, and barely that. Mac users have the option of Apple's iWork suite, which works well for basic tasks but is oriented more toward visual document preparation than large-enterprise workflow.
But a new generation of competitors -- Google Docs, IBM Lotus Symphony, OpenOffice.org, and Zoho -- is emerging from two different directions: cloud computing services and open source software. While businesses have embraced SaaS (software as a service) for enterprise applications from CRM to security, and open source software for server operating systems and infrastructure component firmware, they have been far more reluctant to move desktop productivity software to either open source or the cloud. Still, the feature sets and user interfaces of the competition have developed to a point at which they can be considered serious options for personal productivity tasks.
So it's plausible to switch to an Office alternative. But how do you go about actually making the switch? There are several factors to work through, since technology is far from the only issue that has to be considered when thinking about a shift from a market leader to less-popular competitor. And each can have a cost.
The cost of training
Businesses considering alternatives to Office of course have to anticipate a steep cost of change. One of the great advantages of Microsoft Office is the number of people who know how to use its applications. In any switch to an alternative, you would likely need to do a good bit of training -- especially of heavy Excel users who tap into the significant and sometimes inherently complex functionality in that product. And don't forget the cost of rewriting all the Excel macros that create the monthly executive dashboard reporting at the company.
Wednesday, July 9, 2008
Microsoft to add CRM accelerators, online marketplace
Microsoft today turned to its partner community to bolster the functionality of its CRM products with an online directory of partner tools and applications.
Revealed at the Microsoft Worldwide Partner Conference being held this week in Houston, Microsoft Pinpoint will be fully functional in August, according to Brad Wilson, general manager of Microsoft CRM.
"For our partners, it's a no-brainer to engage and be listed," Wilson said. "We think it's a great way for our partners to get exposure and a connection to our customers and prospects."
Customers can access Pinpoint online or directly through CRM Online or Dynamics CRM via the new resource center function, which provides tips and best practices for getting the most out of their CRM implementation. Microsoft develops its own add-ons, which will be offered elsewhere.
Microsoft also said today that it will release solution accelerators between its major CRM point releases. The first eight accelerators were announced today and will be released in the third quarter. They include an accelerator for sales methodology integration, which provides pre-built integration with methodologies like Miller-Heiman. Other accelerators due in the third quarter include e-service integration, allowing customers to submit service requests online; alerts and notifications accelerator, which pushes out updates to customer information through RSS; and an event management template for companies that run public events.
"A lot of these use the metadata configuration capabilities in our product," Wilson said. "They're released as shared sourced through our customers and partners."
The accelerators will be free and available via download from Microsoft or its partners.
Microsoft is also hoping to expand its CRM Online customer base through a ready-made group of prospects -- its giant partner channel. Yesterday, Microsoft said it would offer the Professional Plus version to partners with offline synchronization for $19 per user per month, a significant discount from the standard $59 per user per month list price.
"We want our broad partner base to embrace CRM online as a way to handle their customer management needs," Wilson said.
Microsoft says it plans to offer a free Software as a Service (SaaS) readiness tool to help partners and independent software vendors evaluate their readiness to offer on-demand products and services.
Revealed at the Microsoft Worldwide Partner Conference being held this week in Houston, Microsoft Pinpoint will be fully functional in August, according to Brad Wilson, general manager of Microsoft CRM.
"For our partners, it's a no-brainer to engage and be listed," Wilson said. "We think it's a great way for our partners to get exposure and a connection to our customers and prospects."
Customers can access Pinpoint online or directly through CRM Online or Dynamics CRM via the new resource center function, which provides tips and best practices for getting the most out of their CRM implementation. Microsoft develops its own add-ons, which will be offered elsewhere.
Microsoft also said today that it will release solution accelerators between its major CRM point releases. The first eight accelerators were announced today and will be released in the third quarter. They include an accelerator for sales methodology integration, which provides pre-built integration with methodologies like Miller-Heiman. Other accelerators due in the third quarter include e-service integration, allowing customers to submit service requests online; alerts and notifications accelerator, which pushes out updates to customer information through RSS; and an event management template for companies that run public events.
"A lot of these use the metadata configuration capabilities in our product," Wilson said. "They're released as shared sourced through our customers and partners."
The accelerators will be free and available via download from Microsoft or its partners.
Microsoft is also hoping to expand its CRM Online customer base through a ready-made group of prospects -- its giant partner channel. Yesterday, Microsoft said it would offer the Professional Plus version to partners with offline synchronization for $19 per user per month, a significant discount from the standard $59 per user per month list price.
"We want our broad partner base to embrace CRM online as a way to handle their customer management needs," Wilson said.
Microsoft says it plans to offer a free Software as a Service (SaaS) readiness tool to help partners and independent software vendors evaluate their readiness to offer on-demand products and services.
Monday, July 7, 2008
Gartner: CRM market up 23 percent in '07
Global spending on CRM (customer relationship management) software surged in 2007 to roughly US$8.1 billion, a 23.1 percent jump over 2006's total of about $6.6 billion, according to the research firm Gartner.
Some of the increase can be attributed to currency fluctuations, noted Gartner analyst Sharon Mertz. The weak U.S. dollar has resulted in software companies reporting higher totals from sales made abroad.
"Although our estimates for 2007 accurately reflect dollar-valued market growth, they overstate market growth from the perspective of most other currencies. Accordingly, great care should be exercised in their interpretation," Mertz wrote.
SAP held the top spot, with 25.4 percent market share, followed by Oracle with 16.3 percent. Salesforce placed third with 8.4 percent, followed by Amdocs at 5.2 percent and Microsoft with 4.1 percent.
Salesforce and Microsoft registered the highest growth rates of the top vendors, with 49.8 percent and 88.6 percent, respectively.
Most CRM spending is still happening in Western markets, with 53.4 percent in North America and 31.8 percent in Western Europe. But while sales in emerging markets only account for 15 percent of the overall tally, both the Middle East/Africa and Eastern European regions saw growth rates in 2007 of more than 40 percent, according to Gartner.
The CRM category encompasses a number of subsegments, including sales, marketing and customer service, the report notes.
During 2007, the sales subsegment grew 27.6 percent, a figure that represents 40.5 percent of the overall market, compared to 39 percent in 2006. Marketing automation products had a 15.4 percent growth rate, for 20.3 percent of the overall market, a slight drop from their 21.6 percent take in 2006. The customer service segment rose 22.7 percent, for roughly 39 percent market share.
Trends driving the CRM market include social networking and related technologies, the report notes.
"Businesses face increasing challenges identifying customers, determining which behaviors they should be monitoring and subsequently responding to, and which types of social media are appropriate to support their particular business and industry," Mertz wrote. "Customers will look to vendors to provide innovative technologies and services that assist them in proactively channeling the power of social nets into successful CRM strategies."
Oracle, for one, is beginning to roll out a series of "social CRM" applications. The first is Sales Prospector, which is meant to help salespeople find viable leads by analyzing the buying histories of companies. Users add data from their sales transactions; over time, the additional information improves the database and provides better recommendations, thereby giving users an impetus to participate, according to Oracle.
Mertz was not available for comment Monday. But another industry analyst described the CRM space as a "moveable feast."
"It's a category that's continually expanding its reach. I guess the key question is whether the CRM vendors like Salesforce, Oracle, Microsoft, SAP, et al, will expand into areas which are being developed nicely by niche players or whether they'll continue to be content to partner," said China Martens, an analyst with the 451 Group.
Source:networkworld.com
Some of the increase can be attributed to currency fluctuations, noted Gartner analyst Sharon Mertz. The weak U.S. dollar has resulted in software companies reporting higher totals from sales made abroad.
"Although our estimates for 2007 accurately reflect dollar-valued market growth, they overstate market growth from the perspective of most other currencies. Accordingly, great care should be exercised in their interpretation," Mertz wrote.
SAP held the top spot, with 25.4 percent market share, followed by Oracle with 16.3 percent. Salesforce placed third with 8.4 percent, followed by Amdocs at 5.2 percent and Microsoft with 4.1 percent.
Salesforce and Microsoft registered the highest growth rates of the top vendors, with 49.8 percent and 88.6 percent, respectively.
Most CRM spending is still happening in Western markets, with 53.4 percent in North America and 31.8 percent in Western Europe. But while sales in emerging markets only account for 15 percent of the overall tally, both the Middle East/Africa and Eastern European regions saw growth rates in 2007 of more than 40 percent, according to Gartner.
The CRM category encompasses a number of subsegments, including sales, marketing and customer service, the report notes.
During 2007, the sales subsegment grew 27.6 percent, a figure that represents 40.5 percent of the overall market, compared to 39 percent in 2006. Marketing automation products had a 15.4 percent growth rate, for 20.3 percent of the overall market, a slight drop from their 21.6 percent take in 2006. The customer service segment rose 22.7 percent, for roughly 39 percent market share.
Trends driving the CRM market include social networking and related technologies, the report notes.
"Businesses face increasing challenges identifying customers, determining which behaviors they should be monitoring and subsequently responding to, and which types of social media are appropriate to support their particular business and industry," Mertz wrote. "Customers will look to vendors to provide innovative technologies and services that assist them in proactively channeling the power of social nets into successful CRM strategies."
Oracle, for one, is beginning to roll out a series of "social CRM" applications. The first is Sales Prospector, which is meant to help salespeople find viable leads by analyzing the buying histories of companies. Users add data from their sales transactions; over time, the additional information improves the database and provides better recommendations, thereby giving users an impetus to participate, according to Oracle.
Mertz was not available for comment Monday. But another industry analyst described the CRM space as a "moveable feast."
"It's a category that's continually expanding its reach. I guess the key question is whether the CRM vendors like Salesforce, Oracle, Microsoft, SAP, et al, will expand into areas which are being developed nicely by niche players or whether they'll continue to be content to partner," said China Martens, an analyst with the 451 Group.
Source:networkworld.com
Wednesday, July 2, 2008
Heads in the Cloud at Structure 08 with Salesforce.com and NetSuite
Last week's Structure 08 conference was dominated by Cloud computing and the fact that enterprises haven't figured out how to embrace it. Luminaries from the likes of Salesforce.com and NetSuite outlined their visions of a Clouded future.
Cloud computing
By Stuart Lauchlan, news and analysis editor
“The world is about to change, and change in profoundly interesting ways,” declared Jonathan Yarmis, VP for advanced, emerging and disruptive technologies at AMR Research at the Structure O8 conference in California last week. “The enterprise itself hasn’t figured out how to embrace Cloud computing; users are figuring it out very quickly.
“Kids coming out of college will not go to a company that blocks Facebook. Equally importantly, it’s ineffective. It’s all about the user and we’re not going to stop them," he warned. “We talk all about Web 2.0 and Enterprise 2.0. It’s time to start thinking about User 2.0 and the attitudinal differences these new users bring to the equation. Now ad-hoc, socially-oriented, enterprise agnostic users will take wisdom of clouds anywhere, they have no loyalty to company.”
Yarmis said there needs to be a cultural shift to make Cloud computing work. ”When PCs first came in, and even when computers first came in, the first thing we did was task automation,” he said. “The whole rise of enterprise software has really been around process automation. But at the end of the day, we’ve omitted the social aspect. We’ve solved the CEOs problem; what we haven’t solved is the individual sales person, who is trying to figure out 'Who do I know who can get me in the door of some company?'. They are the poster child of the social revolution, because their job is inherently social.”
The matter of the challenges facing salespeople is where software as as a service (SaaS) firms like Salesforce.com and NetSuite come in. Parker Harris, executive vice president and co-founder of Salesforce.com, argued that scale is a primary consideration when developing Cloud applications. “When we started we thought about the scale of the internet — if everyone was using the service at the same time, what would that look like?" he explained. "From the very beginning at the software layer we thought what would it take to build this thing? We architected it not thinking about biggest customers, but about the internet."
The pain point
“When we started, Marc [Benioff] had a vision of the customer experience of Salesforce.com being as easy as buying a book on Amazon.com,” added Harris. “As a technologist, you want to build a platform, but you risk losing touch with what you're building it for. So when we started, we said we're going to build a service that's fast, simple and right the first time.
From a technology point of view, Salesforce.com has now evolved into a platform for application development in its own right. “As a technology, we wanted to build a platform first, one that is beautiful from a technology perspective," said Harris. "But you risk losing touch with why you're doing it. Originally it was going to be for sales people and there were various abstract layers; we quickly realised the need to unify them. We continued adding layers in response to our customers; columns, end user interface. At that point we realised it could be a platform. We didn't consciously do that.”
There were issues of trust surrounding the deployment of Salesforce.com, he conceded. “When we started, a lot of people said they didn't want to trust their information to anyone,” he said. “Data, privacy... these were all big things, and people were concerned with trusting their customer records and leads with another company. We made the huge step, and now people trust the information services. We sell to business. We do a lot of work on compliance and security issues to meet the needs of enterprise. For business, we are very appropriate.”
Of course, things haven't gone entirely smoothly. “About two years ago we did go through some serious issues and part of it was due to eBay. We were in a data centre and they could give us more power but no space, or space and no power. eBay was the dominant tenant. So we moved everything to new data centres,” he said. “The scale-up was so complex, and we had the top people in the industry and it was too complex at that point. Changing everything and pushing the scale created a layer of complexity.
"We eventually worked it out and scaled it up. We made two big mistakes: we changed everything all at once, which is a huge risk for any business, and we moved onto large scale systems. We had an Oracle database that was heading into some bugs. You're always going to have bugs, but changing everything at once and also pushing scale in a vertical sense created a complexity that was just too hard. Then we hired the guy from eBay who had been through it before to make sure it never happened again!
"Maybe the next guys won't hit that pain point, but we hit it, Amazon hit it, eBay hit it, Facebook hit it. We're all very different businesses but we all hit it. It's not like there's a blueprint that says 'this is how you build a massively scalable service. You never replace it with version 2, so you are forever changing it. There are best practices that have evolved, and people should follow them if they want to do this."
Suite-based approach
Also representing the new world of SaaS business applications was Zach Nelson, CEO of NetSuite who turned his attention to the mid-market. “The mid-market is the last great software market,” he declared. “The Cloud is important in the mid-market because it finally makes it economical to reach the Fortune 5 Million. It's always been very difficult to sell business applications to millions and millions of customers. The other thing that makes that market economical is Google. In the old days, you had to send out lots of direct mail and advertising to find the customers. Now they find you through Google.
“No mature software market looks like the mid-market. No one company has more then 10% market share in the mid-market. It's harder to reach them with marketing and sales and with product. It's harder to run a mid-sized company than it is to run a billion dollar corporation. You have the same problems but not the same resources to deal with them. How do you build an application that's rich enough to deal with the problems, but easy enough to be used by everyone? That's the challenge for the mid-market."
Nelson added that the intergation issues of traditional applications deployments do not go away just because of the Cloud. “Most people see the Cloud and they think that all applications magically work together because they are delivered from the Cloud. Nothing could be further from the truth,” he said. “Google takes the credit for some of this. You click on a link in NetSuite or Salesforce.com and you zoom in on a map from Google Earth and find the office you're going to visit. People look at that and they think 'that's easy, maybe I can now have orders in one system and invoices in another and they'll all work together.' No they won't. The web is very good for loosely-coupled applications, but businesses run on very tightly-coupled data models. That's very important if you're considering building applications on one of these platforms.”
Nelson highlighted the old way of buying applications whereby a company would buy Siebel to run sales, SAP to run back office, PeopleSoft to run HR and Broadvision to run the web, then paid ten times as much to tie it all together. “Guess what: the sales guys wanted to see what was in the ERP system, they wanted to see what got shipped,” he said. “So they spent millions of dollars and after about six years it worked for a week, until someone changed a field in Siebel and the whole thing fell apart. So the enterprise standardised on one suite, from SAP or Oracle. At the very least, they had one throat to choke, one person to blame.”
“Now you can swap the names – SAP and Oracle for NetSuite and Salesforce.com – but the issue remains the same. Cloud computing doesn't solve data integration issues. Web services make it easier to connect these applications but the problem is the data stored in the data model. Microsoft has Microsoft CRM and Microsoft Great Plains – they own the code and they can't make it work together. How's the customer ever going to do it?”
The answer is to adopt a suite-based approach, but make sure it's the right suite, said Nelson. “The suite that wins isn't the sales force automation suite,” he warned. “It's the ERP suite because that holds the only data that they trust: what they sold, what they bought, how much did they pay for it, was it returned and so on. You don't ask your sales guy what you sold that month, you ask your finance guy. If you're building applications on a platform then you need to look at the data model on that platform. If you need data from an ERP system, then you better build your app on an ERP platform, not a CRM platform.”
World of hurt
Cloud computing will also change the nature of the services industry. “There's a world of hurt coming for traditional services companies based on the economics and delivery model of Cloud computing and the expectations of customers,” predicted Nelson. “Someone is going to be the Accenture of the mid-market, it's just not going to be Accenture or any of the top 100 VARs around today. Just as no traditional software company has been successful at delivering SaaS, I believe no traditional services company will be either. Why is this? Someday the traditional VARs will embrace SaaS but they need to go through a transformation just as software firms have.”
He illustrated his point with the example of a $75k perpetual licence for Great Plains versus a $25k NetSuite subscription. “The Great Plains VAR will get one to three times the licence cost to implement it, so you're looking at $75k to $225k to implement Great Plains. Am I going to get $225k to implement a $25k licence? No way! The customer mind set won't buy that. But I still have costs attached to implementing – like business process re-engineering and training – but that's the economic problem for SaaS firms. We run services as a zero gross margin business, we see it as a vehicle for renewals. That's another challenge for services companies – we're not even trying to make a profit in services.”
Nelson suggested that SaaS will become service as software. “At Oracle in the old days, Ray Lane was always talking about needing template accounts where we could reuse customisations from one account to another. It never happened,” he recalled. “But it's always been the Holy Grail of services companies – instead of doing one-off implementations, take the implementation from that customer and use it for another.
"One-off services will become reusable, re-sellable software. Service as software will mean that instead of sending your little man out to do warranties and servicing to every company you sell to, why not send him out once, then take that as software into another account. Take that warranty management system for one customer and inject it into another. Services companies will start to look more like software firms. This is the future of the services industry.”
Freelance Project Management
Cloud computing
By Stuart Lauchlan, news and analysis editor
“The world is about to change, and change in profoundly interesting ways,” declared Jonathan Yarmis, VP for advanced, emerging and disruptive technologies at AMR Research at the Structure O8 conference in California last week. “The enterprise itself hasn’t figured out how to embrace Cloud computing; users are figuring it out very quickly.
“Kids coming out of college will not go to a company that blocks Facebook. Equally importantly, it’s ineffective. It’s all about the user and we’re not going to stop them," he warned. “We talk all about Web 2.0 and Enterprise 2.0. It’s time to start thinking about User 2.0 and the attitudinal differences these new users bring to the equation. Now ad-hoc, socially-oriented, enterprise agnostic users will take wisdom of clouds anywhere, they have no loyalty to company.”
Yarmis said there needs to be a cultural shift to make Cloud computing work. ”When PCs first came in, and even when computers first came in, the first thing we did was task automation,” he said. “The whole rise of enterprise software has really been around process automation. But at the end of the day, we’ve omitted the social aspect. We’ve solved the CEOs problem; what we haven’t solved is the individual sales person, who is trying to figure out 'Who do I know who can get me in the door of some company?'. They are the poster child of the social revolution, because their job is inherently social.”
The matter of the challenges facing salespeople is where software as as a service (SaaS) firms like Salesforce.com and NetSuite come in. Parker Harris, executive vice president and co-founder of Salesforce.com, argued that scale is a primary consideration when developing Cloud applications. “When we started we thought about the scale of the internet — if everyone was using the service at the same time, what would that look like?" he explained. "From the very beginning at the software layer we thought what would it take to build this thing? We architected it not thinking about biggest customers, but about the internet."
The pain point
“When we started, Marc [Benioff] had a vision of the customer experience of Salesforce.com being as easy as buying a book on Amazon.com,” added Harris. “As a technologist, you want to build a platform, but you risk losing touch with what you're building it for. So when we started, we said we're going to build a service that's fast, simple and right the first time.
From a technology point of view, Salesforce.com has now evolved into a platform for application development in its own right. “As a technology, we wanted to build a platform first, one that is beautiful from a technology perspective," said Harris. "But you risk losing touch with why you're doing it. Originally it was going to be for sales people and there were various abstract layers; we quickly realised the need to unify them. We continued adding layers in response to our customers; columns, end user interface. At that point we realised it could be a platform. We didn't consciously do that.”
There were issues of trust surrounding the deployment of Salesforce.com, he conceded. “When we started, a lot of people said they didn't want to trust their information to anyone,” he said. “Data, privacy... these were all big things, and people were concerned with trusting their customer records and leads with another company. We made the huge step, and now people trust the information services. We sell to business. We do a lot of work on compliance and security issues to meet the needs of enterprise. For business, we are very appropriate.”
Of course, things haven't gone entirely smoothly. “About two years ago we did go through some serious issues and part of it was due to eBay. We were in a data centre and they could give us more power but no space, or space and no power. eBay was the dominant tenant. So we moved everything to new data centres,” he said. “The scale-up was so complex, and we had the top people in the industry and it was too complex at that point. Changing everything and pushing the scale created a layer of complexity.
"We eventually worked it out and scaled it up. We made two big mistakes: we changed everything all at once, which is a huge risk for any business, and we moved onto large scale systems. We had an Oracle database that was heading into some bugs. You're always going to have bugs, but changing everything at once and also pushing scale in a vertical sense created a complexity that was just too hard. Then we hired the guy from eBay who had been through it before to make sure it never happened again!
"Maybe the next guys won't hit that pain point, but we hit it, Amazon hit it, eBay hit it, Facebook hit it. We're all very different businesses but we all hit it. It's not like there's a blueprint that says 'this is how you build a massively scalable service. You never replace it with version 2, so you are forever changing it. There are best practices that have evolved, and people should follow them if they want to do this."
Suite-based approach
Also representing the new world of SaaS business applications was Zach Nelson, CEO of NetSuite who turned his attention to the mid-market. “The mid-market is the last great software market,” he declared. “The Cloud is important in the mid-market because it finally makes it economical to reach the Fortune 5 Million. It's always been very difficult to sell business applications to millions and millions of customers. The other thing that makes that market economical is Google. In the old days, you had to send out lots of direct mail and advertising to find the customers. Now they find you through Google.
“No mature software market looks like the mid-market. No one company has more then 10% market share in the mid-market. It's harder to reach them with marketing and sales and with product. It's harder to run a mid-sized company than it is to run a billion dollar corporation. You have the same problems but not the same resources to deal with them. How do you build an application that's rich enough to deal with the problems, but easy enough to be used by everyone? That's the challenge for the mid-market."
Nelson added that the intergation issues of traditional applications deployments do not go away just because of the Cloud. “Most people see the Cloud and they think that all applications magically work together because they are delivered from the Cloud. Nothing could be further from the truth,” he said. “Google takes the credit for some of this. You click on a link in NetSuite or Salesforce.com and you zoom in on a map from Google Earth and find the office you're going to visit. People look at that and they think 'that's easy, maybe I can now have orders in one system and invoices in another and they'll all work together.' No they won't. The web is very good for loosely-coupled applications, but businesses run on very tightly-coupled data models. That's very important if you're considering building applications on one of these platforms.”
Nelson highlighted the old way of buying applications whereby a company would buy Siebel to run sales, SAP to run back office, PeopleSoft to run HR and Broadvision to run the web, then paid ten times as much to tie it all together. “Guess what: the sales guys wanted to see what was in the ERP system, they wanted to see what got shipped,” he said. “So they spent millions of dollars and after about six years it worked for a week, until someone changed a field in Siebel and the whole thing fell apart. So the enterprise standardised on one suite, from SAP or Oracle. At the very least, they had one throat to choke, one person to blame.”
“Now you can swap the names – SAP and Oracle for NetSuite and Salesforce.com – but the issue remains the same. Cloud computing doesn't solve data integration issues. Web services make it easier to connect these applications but the problem is the data stored in the data model. Microsoft has Microsoft CRM and Microsoft Great Plains – they own the code and they can't make it work together. How's the customer ever going to do it?”
The answer is to adopt a suite-based approach, but make sure it's the right suite, said Nelson. “The suite that wins isn't the sales force automation suite,” he warned. “It's the ERP suite because that holds the only data that they trust: what they sold, what they bought, how much did they pay for it, was it returned and so on. You don't ask your sales guy what you sold that month, you ask your finance guy. If you're building applications on a platform then you need to look at the data model on that platform. If you need data from an ERP system, then you better build your app on an ERP platform, not a CRM platform.”
World of hurt
Cloud computing will also change the nature of the services industry. “There's a world of hurt coming for traditional services companies based on the economics and delivery model of Cloud computing and the expectations of customers,” predicted Nelson. “Someone is going to be the Accenture of the mid-market, it's just not going to be Accenture or any of the top 100 VARs around today. Just as no traditional software company has been successful at delivering SaaS, I believe no traditional services company will be either. Why is this? Someday the traditional VARs will embrace SaaS but they need to go through a transformation just as software firms have.”
He illustrated his point with the example of a $75k perpetual licence for Great Plains versus a $25k NetSuite subscription. “The Great Plains VAR will get one to three times the licence cost to implement it, so you're looking at $75k to $225k to implement Great Plains. Am I going to get $225k to implement a $25k licence? No way! The customer mind set won't buy that. But I still have costs attached to implementing – like business process re-engineering and training – but that's the economic problem for SaaS firms. We run services as a zero gross margin business, we see it as a vehicle for renewals. That's another challenge for services companies – we're not even trying to make a profit in services.”
Nelson suggested that SaaS will become service as software. “At Oracle in the old days, Ray Lane was always talking about needing template accounts where we could reuse customisations from one account to another. It never happened,” he recalled. “But it's always been the Holy Grail of services companies – instead of doing one-off implementations, take the implementation from that customer and use it for another.
"One-off services will become reusable, re-sellable software. Service as software will mean that instead of sending your little man out to do warranties and servicing to every company you sell to, why not send him out once, then take that as software into another account. Take that warranty management system for one customer and inject it into another. Services companies will start to look more like software firms. This is the future of the services industry.”
Freelance Project Management
Yahoo no easy meal for Microsoft
AS rumours swirl around the tech world of Yahoo and Microsoft taking yet another tilt at a merger, alliance or other arrangement to compete with Google for online advertising, it's hard not to wonder whether Steve Ballmer and his team are pursuing the wrong partner in the wrong market.
Microsoft's most visible recent plays have been consumer-oriented wins such as Xbox and games, and duds such as MSN and online search, but since 2000 the real growth action has been sales to (and footprint inside) enterprise IT users.
Across all but the top end of the server market Windows has swept aside proprietary Unix competitors such as Solaris and Hewlett-Packard Unix, leaving Linux as the only real rival.
Redmond has also built strong positions in email, databases, small business enterprise resource planning and other small business applications.
Meanwhile, corporate purchases of desktop Windows and Office remain great franchises, even if they are no longer the growth drivers they once were.
This begs an obvious question: should Microsoft be seeking a different way to reinvent itself rather than the right permutation with an obviously reluctant partner that is bleeding talent and falling further behind Google with each day that its myopic and anti-shareholder leaders continue to equivocate?
It's a little more than four years since Microsoft and another enterprise software giant, Germany's SAP, called off secret merger talks because a combination of the two would be too complicated to integrate and manage -- and too powerful to pass anti-trust scrutiny.
During those four years, rumours of renewed interest from Microsoft and/or SAP in a deal have surfaced periodically, but nothing concrete has been confirmed. Nor have those impediments to a deal disappeared.
Still, a lot has changed since 2004 to make a deal like the one mooted back then look a lot more plausible:
* Oracle has used acquisitions to build itself into a potent counterweight to SAP in the market for high-end enterprise planning, process automation and business intelligence apps -- leaving Microsoft, IBM and HP in the dust, and possibly reducing anti-trust concerns.
* As a result, the once-solid relationship between Oracle and SAP has cooled and at times become downright hostile.
* As it has tried to broaden beyond large corporations and governments, SAP has run into mounting competition for smaller sales from software-as-a-service plays such as Salesforce.com and Netsuite (and from Microsoft's Dynamics packaged software, derived from acquisitions of Great Plains and Navision).
* With Gmail and its initial iterations of ad-supported online productivity apps, Google has made it clear it plans to attack Microsoft's corporate apps business.
* Microsoft, which had never spent more than $US1.5 billion on a purchase at the time of the 2003-04 talks with SAP, has shown a willingness to do much bigger deals, such as 2007's $US6 billion purchase of web marketer aQuantive and its recent $US45 billion bid for Yahoo.
* Microsoft also has a lot more experience of integrating acquisitions, as a result of bedding down the deals it did not long before the SAP talks (Visio, Navision, Great Plains) and deals it has done since (TellMe, aQuantive, FAST).
* Anti-trust concerns among US and EU regulators over most packaged software markets have faded because of the rise of web services and Microsoft's efforts to settle cases and play nicely with others.
At a more abstract level, focusing on the enterprise (including enterprise desktops) amid the emergence of web services and software-as-a-service seems a terrific way to sidestep Google's strengths and turn what today is depicted as a simple face-off between packaged licensed software and ad-supported services into a more complex game.
For a start, it is hard to see any but the smallest businesses switching to workplace desktop apps paid for by trailing enticing (and distracting) ads in front of their employees.
(Unless the business itself is the main entity making money when its employees click on them?) Far more subtle models will be needed than in the consumer space.
Of course, there are also plenty of reasons why a Microsoft-SAP deal (which is not the only way Ballmer and his team could make a game-changing, enterprise-oriented play, but certainly the most emphatic and far-reaching option) would involve daunting challenges, just as it did in 2004.
* SAP still costs a bomb: $US63 billion, or half as much again as Microsoft's withdrawn full takeover bid for Yahoo. Moreover, there is no particular sign that its leaders are seeking a sale.
* As the unwinding of DaimlerChrysler reminded everyone, cross-border mergers, particularly between companies with vastly different cultures and histories, are notoriously difficult to make work.
* Neither Microsoft nor SAP has as yet shown much success in the embryonic software-as-a-service space, although both seem to have all the skills and competencies needed to do so if they can face the resulting cannibalisation of their existing business models.
* Both Microsoft and SAP face increasing competition from open source (although up to this point it has posed little direct threat to SAP).
* Putting together two leviathans makes the law of large numbers that much harder to overcome if the objective is flashy growth rates -- although realistically, neither company is really priced as a growth stock any more.
Perhaps the biggest hurdles to a renewed look at SAP (or any other enterprise-oriented alternative to the current blinkered pursuit of Yahoo, Google and online ad revenues) is that it would represent such a reversal of Microsoft's recent rhetoric.
Tilting Microsoft further towards enterprise IT and away from its long dominance of the consumer market, in a sense, also requires a rewiring of the company's DNA which might be beyond Ballmer.
As so many recent retrospectives on Bill Gates have underscored, the lasting greatness and achievement of the company he founded rests on its success in making computing accessible to everyone: in putting a PC on every desktop.
To turn away from that heritage, even in the sense of skewing resources and future priorities towards a more focused set of users who happen to be willing to hand over cash, would not be easy.
It might, however, be necessary if Microsoft is to retain its dominance and market clout as the pursuit of Yahoo moves into its sixth month with no end in sight and no assurance of success even if a deal does get done.
Microsoft's most visible recent plays have been consumer-oriented wins such as Xbox and games, and duds such as MSN and online search, but since 2000 the real growth action has been sales to (and footprint inside) enterprise IT users.
Across all but the top end of the server market Windows has swept aside proprietary Unix competitors such as Solaris and Hewlett-Packard Unix, leaving Linux as the only real rival.
Redmond has also built strong positions in email, databases, small business enterprise resource planning and other small business applications.
Meanwhile, corporate purchases of desktop Windows and Office remain great franchises, even if they are no longer the growth drivers they once were.
This begs an obvious question: should Microsoft be seeking a different way to reinvent itself rather than the right permutation with an obviously reluctant partner that is bleeding talent and falling further behind Google with each day that its myopic and anti-shareholder leaders continue to equivocate?
It's a little more than four years since Microsoft and another enterprise software giant, Germany's SAP, called off secret merger talks because a combination of the two would be too complicated to integrate and manage -- and too powerful to pass anti-trust scrutiny.
During those four years, rumours of renewed interest from Microsoft and/or SAP in a deal have surfaced periodically, but nothing concrete has been confirmed. Nor have those impediments to a deal disappeared.
Still, a lot has changed since 2004 to make a deal like the one mooted back then look a lot more plausible:
* Oracle has used acquisitions to build itself into a potent counterweight to SAP in the market for high-end enterprise planning, process automation and business intelligence apps -- leaving Microsoft, IBM and HP in the dust, and possibly reducing anti-trust concerns.
* As a result, the once-solid relationship between Oracle and SAP has cooled and at times become downright hostile.
* As it has tried to broaden beyond large corporations and governments, SAP has run into mounting competition for smaller sales from software-as-a-service plays such as Salesforce.com and Netsuite (and from Microsoft's Dynamics packaged software, derived from acquisitions of Great Plains and Navision).
* With Gmail and its initial iterations of ad-supported online productivity apps, Google has made it clear it plans to attack Microsoft's corporate apps business.
* Microsoft, which had never spent more than $US1.5 billion on a purchase at the time of the 2003-04 talks with SAP, has shown a willingness to do much bigger deals, such as 2007's $US6 billion purchase of web marketer aQuantive and its recent $US45 billion bid for Yahoo.
* Microsoft also has a lot more experience of integrating acquisitions, as a result of bedding down the deals it did not long before the SAP talks (Visio, Navision, Great Plains) and deals it has done since (TellMe, aQuantive, FAST).
* Anti-trust concerns among US and EU regulators over most packaged software markets have faded because of the rise of web services and Microsoft's efforts to settle cases and play nicely with others.
At a more abstract level, focusing on the enterprise (including enterprise desktops) amid the emergence of web services and software-as-a-service seems a terrific way to sidestep Google's strengths and turn what today is depicted as a simple face-off between packaged licensed software and ad-supported services into a more complex game.
For a start, it is hard to see any but the smallest businesses switching to workplace desktop apps paid for by trailing enticing (and distracting) ads in front of their employees.
(Unless the business itself is the main entity making money when its employees click on them?) Far more subtle models will be needed than in the consumer space.
Of course, there are also plenty of reasons why a Microsoft-SAP deal (which is not the only way Ballmer and his team could make a game-changing, enterprise-oriented play, but certainly the most emphatic and far-reaching option) would involve daunting challenges, just as it did in 2004.
* SAP still costs a bomb: $US63 billion, or half as much again as Microsoft's withdrawn full takeover bid for Yahoo. Moreover, there is no particular sign that its leaders are seeking a sale.
* As the unwinding of DaimlerChrysler reminded everyone, cross-border mergers, particularly between companies with vastly different cultures and histories, are notoriously difficult to make work.
* Neither Microsoft nor SAP has as yet shown much success in the embryonic software-as-a-service space, although both seem to have all the skills and competencies needed to do so if they can face the resulting cannibalisation of their existing business models.
* Both Microsoft and SAP face increasing competition from open source (although up to this point it has posed little direct threat to SAP).
* Putting together two leviathans makes the law of large numbers that much harder to overcome if the objective is flashy growth rates -- although realistically, neither company is really priced as a growth stock any more.
Perhaps the biggest hurdles to a renewed look at SAP (or any other enterprise-oriented alternative to the current blinkered pursuit of Yahoo, Google and online ad revenues) is that it would represent such a reversal of Microsoft's recent rhetoric.
Tilting Microsoft further towards enterprise IT and away from its long dominance of the consumer market, in a sense, also requires a rewiring of the company's DNA which might be beyond Ballmer.
As so many recent retrospectives on Bill Gates have underscored, the lasting greatness and achievement of the company he founded rests on its success in making computing accessible to everyone: in putting a PC on every desktop.
To turn away from that heritage, even in the sense of skewing resources and future priorities towards a more focused set of users who happen to be willing to hand over cash, would not be easy.
It might, however, be necessary if Microsoft is to retain its dominance and market clout as the pursuit of Yahoo moves into its sixth month with no end in sight and no assurance of success even if a deal does get done.
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