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Betting on the NetSuite IPO

Posted on December 6, 2006 ·

(Updated)

Phil Wainewright at ZDNet is running a poll on whether NetSuite will have a chance to go ahead with the long-awaited IPO or it will get folded back into the Empire.

I’m somewhat surprised by the above results, but since this is an early snapshot, please check the live poll for the current vote count.

Surprise or not, acquisition by Oracle is a realistic scenario, considering Larry Ellison’s close to 60% stake in NetSuite. This is certainly fellow Enterprise Irregular Jason Wood’s take.

I tend to believe that NetSuite is better off being an independent business; there are just too many differences for a merger to work well, and I don’t mean only technical, product-related differences. NetSuite is still largely a small business (SMB) player, and that’s a market that requires an entirely different Sales and Marketing approach, amongst others, and Oracle with it’s current “legacy” salesforce just can’t reach this market profitably. If your products are different, your target market is different, your organization, corporate culture are different, where’s the synergy? Big behemoth Oracle would kill NetSuite – Larry is better off with a portfolio approach, cashing in a 10-digit returnsmile_tongue

Talk about the SMB market – there really is no such thing. “SMB” was sufficient to describe the market to avoid, but now that the software industry is getting ready to actually address the needs of this segment, it’s too heterogeneous to be lumped together.A $100M business is just as different from a ten-person startup as it is from a Fortune 1000 company. When analysts talk about SMB, they really have the mid-market in mind; when SAP is announcing new SMB initiatives, it targets $100-$200M companies.

The forgotten “long tail” represents a huge untapped opportunity: millions of (very) small businesses that can now directly be reached, sold to, serviced inexpensively over the Net – classic SaaS style. Different markets require different organizations – NetSuite serves this segment much better than Oracle (or SAP, for that matter) ever could. In fact SAP would be wise to copy this chapter from Ellison’s book: it should get it’s own “NetSuite” by investing in (not acquiring) an up-and-coming small-business focused All-in-One SaaS provider, like European 24SevenOffice. The next NetSuite.

Update (12/11): NetSuite Gets Ready For Its Close-Up by BusinessWeek.
Update (12/19): TechCrunch is running a story titled NetSuite’s Going Public, Looking for $1 Billion Valuation. I don’t know if it’s based on new information or …. (?)


Filed Under: Business, Enterprise Software, ERP / CRM, SaaS, SMB / SME, Software, Technology · Tagged: , , , , , , , , , , , , , , , , ,
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Zoho Releases MS Office Plug-ins, API’s and Desktopized Web Apps

Posted on November 30, 2006 ·

Zoho releases product updates more or less weekly, and I don’t normally write them – frankly, I can’t keep track. (I do know, however, that Zoho Sheet that was just a cute but limited editor when I first looked at it is by now way beyond my average spreadsheet needs.)

Today’s announcements, however, fit the theme I laid out  in the previous post about Microsoft Office, specifically about getting released from Microsoft-prison. They way to get there is to be able to easily work with Microsoft documents (spreadsheet, presentation) formats without the need for bloated and overpriced MS software.

Directly opening/writing to MS formats was the obvious starting point; in the previous post I mentioned Zoho Quickread, a plug-in that allows opening of any MS Office files directly from the browser (IE, FF) without first importing/converting them. 

Today Zoho adds plug-ins for MS Office, which allows users to save their work online to Zoho directly from within Microsoft Word and Excel:

By the same token Zoho documents and spreadsheets can be opened directly in MS Office:

 

The first version of Zoho’s open APIs are also released today. 3rd party applications can now easily be integrated with the Zoho Suite. A good example is when online storage  services (OmniDrive, Box.net …etc.) open the documents directly in Zoho and even save them back to their own storage system using the APIs. 

Desktopize ( I kind of liked the previous name, Bubbles, as long as it’ wasn’t referring to Bubble 2.0 smile_tongue) is a good example for productive partnerships.   When Desktopize is installed, it creates Zoho icons on the desktop, allows users to click on them and work in Zoho without the browser as if it was a desktop application, close the window and have it minimized to the systray:

The pic above shows me editing this very article in the desktopized version of Zoho Writer, the Zoho icons in the lower left corner, and the Zoho writer icon in the systray.  Desktopize also allows drag-and-drop uploading from your files directly to Zoho Apps.

These are just one day’s worth of Zoho updates; to keep abreast, check out the Zoho Blogs.

Related posts:

TechCrunch, 

VentureBeat,

CyberNet Technology News, Digital Inspiration, The CIO Weblog

(disclaimer: I’m an advisor to Zoho)

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Filed Under: Collaboration, Personal Productivity, SaaS, SMB / SME, Software, Technology ·
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IdeaWins: Microsoft Contest for Innovative Small Business Idea

Posted on November 16, 2006 ·

I still don’t know if Microsoft’s Software by Parachute initiative was real or just a prank, but here’s another one:  IdeaWins: The Ultimate Challenge – a contest for Innovative Small Businesses.

Software and techie types don’t get your juices flowing just yet: apparently “innovation” is limited to retail businesses, and the award is not only $100K but a year’s rent of a Manhattan storefront, too.

It appears MS released the site in a rush and not all components are ready, as for now submissions are by emailing a downloadable form, but starting November 27th there will be an “innovative” interactive way to enter.

Four Finalists will be selected who can submit a video and the winner will be picked by a public online vote. (digg it? smile_wink)

This contest is basically a PR campaign to promote MS Office Accounting 2007 which is quite evident if you arrive to the IdeaWins Home Page: the FAQ is actually all about the Accounting package, and the contest terms are somewhat hard to find.  If you follow my link from the pic above, you get right into the contest page, where there is a seconds set of FAQ, this time about the contest.  Oh, and of course you’ll be prompted to download MS Accounting a few times along the way…smile_omg

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Filed Under: Business, Marketing / PR, SMB / SME, Software, Startups ·
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24SevenOffice is More than Just Office – Watch Demo

Posted on November 7, 2006 ·

24SevenOffice is an innovative software company offering SaaS for the SMB / SME market that should really be called 24SevenBusiness smile_wink

Their system is modular but integrated with a breath of functionality I simply haven’t seen elsewhere: Accounting, CRM (Contacts, Lead Mgt, SFA), ERP (Supply Chain, Orders, Products, Inventory), Communication, Group Scheduling, HR, Project Management, Publishing, Intranet. Essentially a NetSuite+Communication and Collaboration.

They are innovators in many ways … had an AJAX system long before it was called AJAX and recently they created a “World’s First” by teaming up with a bank that becomes the SaaS provider offering its customers single sign-on Web solutions for banking and all other business software needs.

The system is really comprehensive so it may not be that easy to figure out all features, therefore they released a cool flash demo that walks through the major business processes. (hat tip: Espen Antonsen)

What I really like about 24SevenOffice is that they are proof to my favorite theme, i.e. that small businesses can now have “enterprise” system functionality. My only complaint is that so far they onu cover several European countries; I wish they were faster entering the US market. smile_tongue But I’m hearing that may not be too far now …

Update (11/12): check out Dennis Howlett’s post on Interprise Suite, another integrated system for the SMB market.

Filed Under: Business, Collaboration, Enterprise Software, ERP / CRM, SaaS, SMB / SME, Software, Technology · Tagged: , , , , , , , , , , , ,
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After SaaS Here Comes SbP: (Microsoft) Software By Parachute

Posted on November 2, 2006 ·

Microsoft invented (?) a new software delivery model: Software by Parachute.   Apparently they blanketed the town of Willow Springs, IL with aerial droppings of the new Accounting software.  If the embedded player does not work, watch the videos here and here. (hat tip: Julius Danilevsky)

 

 

Note: I have no way to verify if this is a hoax or real, but I suppose we’ll know within hours.

 

Filed Under: Marketing / PR, SMB / SME, Software ·
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SaaS: The Cat is Out of the Bag

Posted on October 12, 2006 ·

I’m sitting at the Office 2.0 conference watching a barrage of 5-minute product demos. FreshBooks‘s CEO just dropped a bomb at the last 20 seconds in his presentation: being software as as service, they can aggregate customers’ data, categorize it by industry, size ..etc, and once they do that, why not turn it into a product?

Customers can receive generalized metrics as well as benchmark themselves against their peers.

Stop here. Think about it. This is big. It’s not about FreshBooks. It’s *the* hidden business model enabled by SaaS. It is so logical, we all had to know it would be coming – but carefully avoids talking about it. No wonder… SaaS adoption is growing but still at an early stage, and security, trust concerns are huge. The last thing software vendors want is to feed those concerns, i.e get their customers worried about the competition accessing their data.

The benefits are obvious: all previous benchmarking efforts were hampered by the quality of source data, which, with all systems behind firewalls was at least questionable. SaaS providers will have access to the most authentic data ever, aggregation if which leads to the most reliable industry metrics and benchmarking. Yet it raises a number of serious questions: How far can they go? What are the security / confidentiality / privacy implications? Are they reselling data that the customer owns in the first place? If the customer owned the core data, who owns the aggregate?

The business of metrics, benchmarking is potentially huge, but it can’t take off until the industry, along with customers, can answer these questions – and more.

Update (10/16): I’ve just checked who else talks about this Unheralded SaaS benefit, and voila! Two posts from fellow Enterprise Irregulars, ex-Gartner Vinnie Mirchandani and Yankee Group’s Jason Costello.

Update (10/30): Read Dennis on Valuing Data and on Freshbooks.

Filed Under: SaaS, SMB / SME · Tagged: , , , , , , , , , ,
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From Office Suite to Business Suite

Posted on October 9, 2006 ·

Zoho is definitely getting an increasing share of attention.  No wonder – they are releasing product updates at a rate others do press releases.  The introduction of a single sign-on  to six of their Office 2.0 applications generated quite some buzz on a normally silent weekend.  TechCrunch,  ZDNet,  Read/Write Web,  AccMan Pro,  yours truly – the usual suspects, one might say, but when “good-old-fashioned” ex-Gartner Vinnie Mirchandani pays attention, you know something is brewing here.

Richard MacManus claims Zoho Moving Towards A Full Web Office Suite.   Previously both myself and IT|Redux claimed the Zoho Suite complete.  So are we there yet?  Well, MS Office was called a suite long before Word, Excel or Powerpoint could really talk to each other. It was ugly, messy, lossy copy/paste for years – Zoho demonstrated a far better, seamless flow and real-time data updates between a spreadsheet, database, document and presentation at the recent IBDNetwork event, and I’m sure we’re in for some surprise at the the Office 2.0 Conference this week. 

But let’s look a bit further, and we’ll find that Zoho has a few more tricks in their hat.  Near-term we can expect a web-based version of Virtual Office, a communication/collaboration solution (think Outlook), which really makes the Office / Productivity suite full-rounded. 

How about transactional business systems?  Zoho has a CRM solution – big deal, one might say, the market is saturated with CRM solutions.  However, what Zoho has here goes way beyond the scope of traditional CRM: they support Sales Order Management, Procurement, Inventory Management, Invoicing – to this ex-ERP guy it appears Zoho has the makings of a CRM+ERP solution, under the disguise of the CRM label.

Think about it.   All they need is the addition Accounting, and Zoho can come up with an unparalleled Small Business Suite, which includes the productivity suite (what we now consider the Office Suite) and all process-driven, transactional systems: something like NetSuite + Microsoft, targeted for SMB’s.

 

(Disclaimer: although I have an advisory relationship with Zoho, the above is purely my own speculation)

Filed Under: Business, Collaboration, ERP / CRM, Personal Productivity, SaaS, SMB / SME, Software, Technology ·
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Your Neighborhood Bank Becomes Your Trusted SaaS Provider

Posted on September 8, 2006 ·

If you’re like me, you haven’t talked to a bank teller for years, in fact haven’t set foot inside a branch for a long time. Why should you? You do all your banking online. (?) But you probably wouldn’t think of your bank as *The* Software as a Service provider to run your entire small business…

That’s exactly what Fokus bank pulled off in Norway, in cooperation with 24SevenOffice and Bluegarden. The new, innovative bundle is probably the first of its kind in the World: single sign-on Web solution for your banking and all other business software needs. (hat tip: Espen Antonsen)

Let me reiterate: it’s not just online banking, but a full hosted business system. Given all the trouble I had just getting Quicken / Microsoft Money to work with several major US banks, I have a hard time imagining them come forward with such revolutionary offering. Key benefits to:

  • Customers
    • Trust, security. SaaS is not as widely accepted in Europe as in the US, and certainly the key issue is that flexible new products come from lesser known smaller providers, which SMB’s see as a major risk. Having the bank manage your data is a reassuring solution.
  • The Bank
    • Customer retention, in fact competitive advantage to attract businesses away from other banks. In a world when it’s easy to switch banks for the sake of higher interest, Fokus will have a virtual lock on its customers: that of convenience.
  • 24SevenOffice
    • Access to Fokus banks 200,000 customers; prospectively using it as a vehicle to penetrate the Danish Market since Fokus is owned by Danske Bank. Marketing/PR value of launching a “World First”

This is not the first innovative deal coming from 24SevenOffice: previously they teamed up with Telenor, a leading Scandinavian telco to create a 3G “Mobile Office“.

I’ve been following 24SevenOffice for quite a while (and have received occasional updates from Staale Risa, COO), largely due to my obsession with “Enterprise” functionality to small businesses. I can count on a single hand (two fingers?) the number of All-in-One SaaS providers with comparable breadth of functionality: CRM + ERP + Office .

My only wish is that the company entered the US market sooner. Recently they launched an International version, accessible to US customers, but frankly, that’s about the one thing coming from 24SevenOffice that I am unimpressed with. It removes the key value proposition of being a full-rounded, integrated solution ( a’la NetSuite but more) and positions the system as a lower-cost CRM competing head-on with SalesForce.com. Well, I have news for my European friends: this version does not compete with Salesforce, but with the dozens of other challengers. Personally, I think it’s a marketing blunder.

That said I know the company is working on porting their full system (think accounting, HR ..etc) to US requirements and a full blown US launch is in the works …. stay tuned.

Update (9/8): To access the full 24SevenOffice site, trick the system by selecting a European country, e.g. the UK. You still have to do some digging, a lot of logistic functions are hidden under Financials.
There’s also a neat demo here.


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Enterprise Software is (Still) Not Dead

Posted on August 18, 2006 ·

Recently I joined my fellow Irregulars (a work-group of bloggers, analysts, journalists who write about Enterprise Software) in jointly publishing an article on Sandhill: Software’s Sky is Not Falling.
All articles get edited, and that’s even more so with multi-author ones; therefore I thought I would post my original, pre-edit piece below.

 

With almost predictable regularity we’re seeing software obituaries popping up just about every month: the only variation in the theme is what’s being declared dead: sometimes it’s Enterprise Software, sometimes it’s email.  Just like I’ve already stated I did not believe email was dead, I strongly disagree it’s time to mourn Enterprise Software.

Since my fellow Irregulars mostly addressed the Open Source angle in Guy Smith’s post, Is Enterprise Software Doomed? I’ll reflect on the SaaS part of his piece.

“SaaS is the bastard child of the traditional proprietary software vendor and the Open Source marketing paradigm.”

SaaS is NOT an offspring of Open Source, although they often get lumped together, especially in buzzword-heavy startup pitches; however, they are quite different animals.

With a great deal of simplification the single most important difference is in the deployment model, SaaS by definition being on-demand, while most Open Source products are on-premise, traditionally installed systems.

Guy sees the natural evolution of Open Source Enterprise Software vendors “retrofitting” their products to SaaS offerings, but in reality most SaaS offerings are commercial, and most Open Source is on-premise, these two being on decidedly different paths.

The common trait, as Guy correctly points out is the change in the sales & marketing process: PR, buzz, online sales cycle process management, free trials, inbound sales, customer-initiated pull process vs. sales push. Yet Guy sees this as a necessity forced by economics: “the reduction in unit revenue will force all Open Source (including Dual Source) vendors to change their marketing and sales cycle “ when in reality these are actively pursued changes that both Open Source and SaaS companies embrace. Without denying the importance of the underlying technology, the most important change SaaS facilitates is this very business model change, which opens up entirely new, unpenetrated business segments for Enterprise Software: small and medium businesses (not just the M but the S in SMB). In fact customer size is another differentiation factor, at least for now, SaaS penetrating the SMB segment, while Open Source is ideal for mid-size companies, that actually have the in-house IT-expertise to play around with OS.

So is it as simple as:

  • small business = SaaS
  • midsize = Open Source
  • large company = traditional software?

Not really, that would be oversimplification. But while it’s easy to declare that for small businesses without their own IT resources there is no better option than SaaS, there is no clear “winner” for large corporations. There shouldn’t be. This is not religion; it should be business decisions that these organizations have to make individually. Analysts fighting the SaaS vs. On-premise war often forget that software exist to resolve business problems. As Charles so eloquently points out, it’s the complexity of these business processes, the need for customization, the number of user seats..etc that matters, and as we move up on this scale, increasingly “traditional” Enterprise Software is the answer. I happen to believe that eventually SaaS will grow up to meet those requirements, but am not going to guess how many years it will take. In the meantime the SaaS-fans (admittedly I am one) can claim that SaaS is the future – but that does not mean Enterprise Software is dead.

If I were to launch a software startup, it would be SaaS. Dave Duffield and his PeopleSoft team have the luxury of starting from scratch launching Workday, a pure SaaS company – since they were forced to walk from PeopleSoft and it’s customer base. But SAP and Oracle, (btw, Guy, since when do we determine market leadership by the amount spent on acquisitions?) together “own” the large corporate space; how could they expect their customers to throw away their investment in traditional software?
On-demand “purists” (the religious types) criticize SAP for their half-hearted hybrid approach to SaaS –  but why would they do anything else?    After all, SaaS is still only 10% of all enterprise software sold. Even if we believe “the future is SaaS” (which is of course unproven, but I happen to believe in it), there is a lot of mileage left in the “old” Enterprise model, and market leaders like SAP have certainly no reason to turn their backs to their huge and profitable customer base.

 

Here are the other “Irregulars” un-edited contributions:

 

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Filed Under: Business, Enterprise Software, ERP / CRM, Open Source, SaaS, SMB / SME, Software, Technology · Tagged:
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What is He Smoking? “Military Management: The New Trend for Small Business”

Posted on July 20, 2006 ·

I generally like Small Business Trends , sometimes even quote their material, but I can’t help but wonder what Jack Yoest (second from left on this 1978 photo) is doing there.

He seems to think that there is a new trend in small businesses, the desire to run a company like a military unit. Wow… I don’t know where he observes this “trend” – I for one tend to believe (small) businesses are better off with a team of partners and collaborators than a military organization. In fact not only smalls ones, but reality is that the collaborative model is a lot more difficult to maintain in a large organization. In fact it’s no wonder that several army commanders make it to the management ranks of the Fortune 1000. (On a personal note, I had the misfortune to “serve” under a Navy Captain turned into Corporate VP who resorted to shuffling around his management team every 6 months or so, and was a master of alienating customers…)

This is not the first time Jack mixes the corporate world with small businesses: 10 Reminders for Effective Management is supposed to be advice to small business owners, but it sounds to me like the typical 80’s corporate mid-manager’s survival guide, as in “how to BS your way through your career, looking busy while doing nothing“. Back then I was wondering if it was a serious article or a satirical piece. Apparently not. Too bad for small businesses. At least for those that buy his teaching.

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Filed Under: Business, SMB / SME, Startups ·
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