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Web 2.0 in the Enterprise – Round 2

Posted on February 22, 2006 ·

Stephen Bryant lists Five Reasons Web 2.0 and Enterprises Don’t Mix (hat tip: Espen Antonsen).  He cites his personal experience of having worked in an innovative small software company that could not close deals with the slow enterprise behemoths. “What we needed was a shorter sales cycle, a very, very big salesforce, or some combination of the two”

One of the key changes we’re experiencing today is that the traditional big salesforce becomes obsolete. 

  • At the recent Web2.0 In the Enterprise event (references here, here, and here)  Ross Mayfield, CEO of Socialtext described his bottom-up grassroots approach: first a small team, typically a department, or an ad-hoc project team starts using the hosted wiki … then some other teams within the same organization … eventually Ross walks in to close a corporate level deal, but by the time it’s a fait accompli.  (more in the Wiki Effect).
  • Jeff Nolan of SAP related his experience after making an investment in Socialtext, and bringing the wiki “officially” in-house: he received dozens of emails from SAP-employees who had long been using the hosted version for their own project, just had not told anyone ,since it was “unofficial”.
  • One of Ross’s competitors, Joe Kraus of JotSpot said: “for the bottom-up effect to work, the price has to be expensable, not approvable”
  • Of course you could argue the above approach will only be feasible with communication / team collaboration tools, not with Enterprise packages that require the whole company to be on the same platform.  Well, it depends.. as Sales VP in a smaller (30 employee, $5M) company I found myself in a situation where not only my team needed a CRM solution, but the whole company needed some IT modernization. For budgetary and resistance reasons we decided the sales team will march ahead on its own, but we implemented NetSuite, laying the foundation for the rest of the company to join us on one integrated system.
  • Finally, a quote from SugarCRM’s John Roberts: “Software is bought, not sold.”  Nice punchline, not a 100% true, just like the “No Software” tagline from the other guy… but delivers the message: sales is replaced by demand generation, becomes a pull– vs. a push-process.

Next I will talk about how Enterprise Software “comes down” to the SMB sector – but for the sake of readability, it  is in the next post.

P.S. Stephen, perhaps one day we’ll hear about the pig-killing job in Tuscany

Update (2/23):  The Doctrine of Slow and Old: Big Business and New Applications 
Update (2/25):  Giving enterprise software practices an ‘angioplasty’   

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Filed Under: Collaboration, Enterprise Software, ERP / CRM, Open Source, SaaS, SMB / SME, Social Networking, Software, Startups ·
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Pre-AJAX AJAX Applications

Posted on September 6, 2005 ·

OK, so this title does not make a lot of sense … I’ll explain:
There’s a lot of hype around AJAX ( Asynchronous JavaScript and XML), which, in laymen’s terms is a set of technologies that allow web applications to have the look’n feel (and speed!) of desktop applications.

Traditional “web behavior” has been one of the main reasons for user reluctance against hosted Enterprise Applications, and innovative companies have come up with AJAX-style solutions for quite a while. Norway-based 24SevenOffice, a provider of hosted, modular All-In-One applications (ERP, CRM, email, calendar ..etc) has had an AJAX-like UI for a year and a half or so. Of course the term AJAX did not exist, so they had to explain at length the benefits of a faster, friendlier, easier-to-use Web Application.

It took a brand like Google, and the gliding-sliding oh-so-beautiful and fast Google Maps for AJAX to become a “household” name and one of the hot IT trends this year. Now longer do we need the long explanation, AJAX is chic du jour, all new web apps have it, and the major hosted Enterprise App’s also go the AJAX way: see NetSuite’s announcement. They claim to be first major business application with broad support of AJAX, but as stated above, they are a little late to the party… Late or not, it’s nice to see mainstream adoption and friendlier Web-apps finally.

For more technical info, as well as a good compilation of reference material, check out Rasmus’ 30 second tutorial. (via Jeff Nolan).

Filed Under: Business, Enterprise Software, ERP / CRM, SaaS, SMB / SME, Software, Startups · Tagged: , , , , , , , ,
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On-Demand Software is Not Just a Lease (Where’s My Upgraded Lexus…)

Posted on August 30, 2005 ·

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Recently several analysts downgraded salesforce.com’s stock, citing high valuation:   Salesforce a A Harder Sell ,  Salesforce.com Shares Seen As Pricy  .  Chris Selland had voiced his doubts regarding the hosted CRM model before (“ won’t cure cancer anytime soon “) , and sees the downgrades as signs that  “the media honeymoon appears to be mostly over”.
I beg to differ … a stock’s valuation is often not indicative of the business’s success, further growth potential, and certainly not of the underlying business model (hosted CRM) in general.  The stock can become an underdog, simply because it had previously ran ahead, was overvalued, while the SalesForce.com (and On-Demand software) continues to grow.

AMR research reported 105% growth in on-demand CRM in 2004. Nevertheless, the debate continues as to how suitable the On-Demand model is, especially for larger Enterprises:  “Is it less expensive to lease or buy a car? If you don’t have a down payment, a lease looks pretty attractive,” says Bob Thompson, founder of CRMguru.com. But if the total overall cost is the main concern, the best strategy is to buy a car and “drive it into the dirt,”  (via The Deal.com)
I think the car analogy is seriously flawed: this is not a simple lease / buy decision.  In the On-Demand model  bug-fixes, even major upgrades are managed centrally in a painless manner, often not even transparent to the Customer.  The car analogy would only be fair if it referred to a lease where any time the car manufacturer had an upgrade (we’re not talking about the new models every 4 years or so, with today’s cars software upgrades, amongst others are almost continuous) my friendly dealer  drove up to my house, leave a new car with identical trim level, color, options (“customization”) at my doorstep and drove the old car away. Now, that’s a lease model not even Lexus came up with … but if anyone knows such a deal, sign me up! 🙂

Of course the on-demand vs. on-premise decision is not simply a matter of TCO (Total Cost of Ownership) analyses.  Phil Wainewright discusses a few other criteria specific to large enterprises. 

Debate or not, I think both camps agree at least in these points:

  • On-Demand software is now a proven business, here to stay
  • It is no longer “only for small businesses”
  • For small businesses though, it is likely to be the best choice
  • There is no “best choice” for a large enterprise, they all have to perform their own analyses and pick the best option.

After more than a decade in the Enterprise Software business with the “biggies” like SAP, IBM, Deloitte  my attention is now focused on the SMB sector, their Enterprise Software and Infrastructure needs.  It’s a very refreshing change, and I’ve come to learn a whole new world. (Having switched from Service Provider to Customer  in a smaller business was a tremendously helpful eye-opener.)   In the next several posts I will look at  On-Demand, Open-Source and other new trends from an SMB point of view.  

 

Filed Under: Business, Enterprise Software, ERP / CRM, SaaS, SMB / SME, Software ·
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