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NetBooks: Integrated SaaS Suite for Very Small Businesses. Almost.

When I started this post 2 months ago, it had a more tongue-in-cheek working title: NetBooks – the Little Gem in Hiding – clearly a play on Dennis Howlett’s  post, NetBooks – a little gem.  That’s because despite Dennis’s positive review of this new SaaS solution for small businesses I found their website a major turn-off .   I did not find a feature-list, screen prints, demos: the closest they had was a contact form to request a scheduled demo.  Failure!  You can’t reach the “long tail” of the market via outbound sales; your site needs to be absolutely transparent, so potential customers can find all feature / price information at their fingertips, then just try-and-buy. 

But what a difference a few weeks make!  Having checked back, now NetBooks offers decent product information, online videos, in fact you can now set up a free trial account with sample data in minutes.  (While it looks like just another contact form, the process is automated, I received my email confirmation within a minute.) Self-navigation definitely beats just watching vid’s. Kudos to NetBooks for fixing a major shortcoming so fast!  (Note to self: don’t leave half-written posts, they may have a short shelf-life…)

Let’s look at the actual system now.  NetBooks aims to be an On-Demand integrated business management solution for small manufacturing businesses – in fact for other types of businesses, too, as long as they hold inventory and ship tangible products.  They cater for  what they call True Small Businesses (TSB), which I referred to as  VSB – very small businesses, the “S” in SMB / SME.  Typically companies with less then 25 employees, sometimes only 3-5, and, most importantly, without professional IT support, hence Software as a Service is a life-saver.

NetBooks tries to cover a complete business cycle, from opportunity through sales, manufacturing, inventory / warehouse management, shipping, billing, accounting – some with more success then others.  Manufacturing, Inventory, Shipping and their integration to Accounting appear to be a stronghold.  If you’re in sales, you’d like to see a Sales Catalog, if you’re in the warehouse, you want an Inventory List, and if you are in manufacturing, you need a Production Elements list: they are all one and the same, allowing you to define a product structure (Bill of Materials, BOM) with different physical characteristics, reorder points, pricing levels, warehousing requirements, marketing notes…etc.   In other words, different functions can update their own slice of the same information and it’s shared with others (of course in a small business several of these functions may very well be carried out by the same person.)

Not having any procurement / purchasing functions appears to be a glaring omission: after all, if you’re in manufacturing, you will likely need to buy some components / materials. 

Another function, nominally present, but rather weak is CRM.  I can set up a Revenue Opportunity list, track contacts, events, even financial terms per record, but what’s the point if I can’t turn these into a Quote, later a Sales Order?  In fact I have to start a sales order from scratch, and it does not update the opportunities: unless you close them out, they will show as prospects long after you shipped the order, invoiced the customer and received payment.

Sales Order creation appears to be  a watershed event in NetBooks: that’s when the system comes alive, integration gets better from here, with information flowing through nicely.  Completing the order creates a shipping document, confirmation of the shipment creates a a billing request, invoice.  Even external services are integrated well, like UPS for Online Shipping and PayCycle for payroll .  There’s a complete “document trail”, you can start from the accounting side, too: from Accounts Payable (invoice) you can trace all actions back to the shipping doc, sales order…etc.

I understand why Dennis with his accounting background considered this system a gem:

As an accountant by training I often make the mistake of taking the number cruncher’s view. On this occasion I don’t have to. The way NetBooks is organized, you enter it according to the role you fulfill. That means you only ever need use the screens that are pertinent to you.

Real-world people record their real-world transactions: manufacturing, physical movement of goods, and the system records the facts in Accounting.  NetBooks  is an accounting system at it’s heart, but one without the need to deal with accounting screens.  This should not come as a surprise, given Founder Ridgley Evers’s own background: he was co-founder at QuickBooks, the de facto standard for small businesses.

Most of the sample data in the NetBooks trial system appear to have come from Evers’s real-life business: Davero Ingredienti, a purveyor of olive oil products, and I think this very well represents the type of small business NetBooks may be ideal for: relatively stable, has a good repeat customer base, receives a  lot of inbound orders and needs to execute on manufacturing and shipping to these customers.  It badly lacks stronger Sales features, and a more flow-oriented thinking to support aggressively growing businesses.

The User Interface is nothing to call home about. You certainly won’t find the lively charts and dashboards seen at Salesforce.com, NetSuite, SugarCRM, Zoho CRM …etc.  But having a simplistic UI is one thing, making it outright boring is another, and hard to use is a capital crime.  In NetBooks you basically navigate through small text lists, then double -click on an item to drill down to more details, wait long (the system, at least the trial one feels very slow) for several overlapping screens to pop up. You have to close or move around some of these pop-ups to see what’s underneath.  And whoever came up with the idea of clicking on those tiny arrows should be banned from web design for life.  

 

Seriously, this isn’t just the lack of rounded-corners-gradient-colors web 2.0 goodness: the poor UI, the microscopic arrows to click on render NetBooks a pain to use. 

Although I’ve been quite critical in this review, I still like the NetBooks concept: give very small businesses an integrated system they previously could not afford. NetBooks starts at $200/month for 5 users, additional users seats are $20.  That’s a fraction of the current “gold standard” in the space, NetSuite – although the step up to NetSuite also brings a wealth of new functionality.  Finally, SAP’s Business ByDesign is worth mentioning: when it becomes widely available, it will be the most function-rich SMB SaaS solution – but their entry point is about where NetBooks’s upper limit is.

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Can the Software Sector be Resilient to Recession?

I was very lucky in the early 90’s being in an industry that was not only shielded from recession, in fact it was thriving.  Corporate America was taught to fight their way out of the slump by Business Process Reengineering, and what better way to execute it than by implementing new integrated business information systems.  The slump for the rest of the country was a major boom for SAP, and the entire ERP industry born in their footsteps.

Today we’re amidst another technology change, one that may just ensure relatively smooth sailing through a recession for the Software sector – at least those who are on the right side of the change.smile_wink  The belts will be tightened, says the New York Times, but technology will still grow, just at a slower rate:

Overall growth in technology spending may fall from 7 percent last year to 4 percent or less this year, according to estimates by IDC, a research firm.

But that won’t be nice 4% growth for the entire industry; I strongly believe pioneers of Software as a Service (SaaS) will be amongst coming out of a slow-down as winners, leaving others in the dust. 

TechCrunch is optimistic for the entire Web 2.0 business:

All of those Enterprise 2.0 startups out there, or even Amazon trying to sell Web-based computing infrastructure, are actually at an advantage. Customers are more likely to try cheap cloud computing when they can no longer afford the alternatives.

ZDNet’s Dan Farber disagrees:

Most of the Web/Enterprise 2.0 startups can’t get a hearing with CIOs and tech buyers at corporations. While consumer applications are influencing corporate applications and coming in through the back door, Enterprise 2.0 apps (blogs, wikis, predictions markets, social networking, mashups, collaborative cloud-based apps and technologies such as RSS and tags) are just beginning to reach the radar of larger corporations, and they are not considered mission critical, which is where the money is funneled first

I think they are both right – and wrong.  I don’t agree that the entire Web 2.0 sector is immune to a down-turn: the advertising market will shrink,  the “lets-grow-insanely-who-needs-a-business-model” types will suffer. As Software VC Will Price says:

It may well be that Slide raising $55m from mutual fund companies at $500m+ pre-money will be the “what were we thinking” moment of the current cycle.

I also agree with Will, that a movie we’ve all seen will be playing again:

The last downturn saw the valley swing violently away from consumers to the enterprise – bastions of value, hard ROI, tangible value propositions, enterprise pain points and budgets, etc became the mainstay of investment decisions and the consumer, I kid you not, was literally a bad word…
The valley became all enterprise, all the time.

It will not be all, and not only Enterprise, but Business Software, whether for the Enterprise or small businesses will come back with a classic, “old-fashioned” business model of actually charging for value (product or service) delivered.  Of course there is still the dilemma of selling business software – much better if you don’t have to, it is getting bought instead. smile_shades  Yes, Dan is right, “Web/Enterprise 2.0 startups can’t get a hearing with CIOs and tech buyers at corporations” and their  apps are not considered mission critical, but the whole point is that a lot of these Enterprise 2.0 tools are not sold at the CIO level.

The after-bubble nuclear period of “no IT spending at all” found me at a startup. We did not exactly hit it big, but did not go under, either, and that’s because our model allowed us to get in the door way below the threshold that would have required higher authorization. Not classic SaaS, rather SES (Software Enabled Service), we were essentially data providers and often got into an “enterprise” account at $3k for the first month … ramping up to $60-$100K annually.   Anyone familiar with Enterprise Sales knows the term Economic Buyer:  typically getting involved later at the sales cycle, approving or nuking the deal.  Well, we saw no Economic Buyer: being under the threshold, we sold to the User directly.

As Zoho CEO Sridhar Vembu adds to the discussion:

It is useful to remember that both Salesforce & WebEx thrived during the last recession – in fact they were relatively unknown during the last boom. Cost was a major part of the reason they thrived in the bust.

Indeed. Software as a Service and the typically associated pay-as-you-go model allows businesses – enterprise and SMB – to use software without the typical upfront investment the traditional model would require, therefore SaaS providers have a good chance of withering a Recession.  Another noteworthy idea in Sridhar’s response is that they really don’t have to have a “massive win”, a total move from the desktop to the cloud: a “marginal” business  is good enough.

Of course this “marginal business” is not as attractive to many startup entrepreneurs as fast forwarding to the IPO, preferably over $1.5B. In fact it’s really boring… building a business gradually; no IPO thrill; serving millions of customers, helping them actually conduct business.  Oh, and making millions of dollars of real revenue in the process – not bad, if you ask me.  And it’s quite bubble-proof. smile_wink

Related posts: Vinnie Mirchandani –  Why it will be very different this time, Fred Wilson- This Time Will Be Different.

Update (1/28): Forrester Research predicts gains for Enterprise Web 2.0 apps in 2008.   Also read: Between the Lines, ReadWriteWeb.

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SmartTurn: Inventory & Warehouse Management SaaS-style

Here’s further proof that the Software as a Service (SaaS) model will not be limited to CRM and Accounting: SmartTurn, providers of the first On-Demand Inventory and Warehouse Management System (WMS) announced today its $5M Series A financing led by New Enterprise Associates (NEA) and Emergence Capital Partners.

I admit the announcement took me by surprise; I have not heard of the company before. A quick look at the Oakland address made me suspicious though, and yes, I was correct: this company is a spin-off of Navis, who are veterans of Warehouse Management systems, from the “old”, i.e. on-premise world. Old-world or not, the Navis team carries the SaaS DNA: a little-known fact is that their CEO, currently Chairman of SmartTurn John Dillon was CEO of Salesforce.com before Founder Marc Benioff took the reins back in 2001. The investors are not exactly new to SaaS either: Emergence Capital were early investors in Salesforce.com, and they specialize on SaaS and nothing else (I believe they are the first Valley VC firm to do so).

Warehouse Management is an awfully complex area (I know first hand, having lead SAP logistic projects in the 90s), so if SmartTurn is successful, it will truly be a validation of all aspects of “Enterprise Software” being eligible for the On-Demand model.

There are very few Enterprise SaaS players around, but SAP’s (SAP)new SaaS product, Business ByDesign for the SMB market and NetSuite (N) for small businesses are worth mentioning: they both offer complete, integrated systems, including Inventory and WMS. The opposite of the integrated systems is the best-of-breed approach, in which case one of the most difficult decisions in enterprise systems is where you draw your functional boundaries, and for companies implementing a multi-system scenario what functions are left in which systems, where to cut overlaps. Inventory Management is planning and accounting for your inventory levels; Warehouse Management is the extension of the concept down to physical locations (warehouses, buildings, down to bin levels). SmartTurn appears to support the Procurement and Order Fulfillment processes as well, which, from a logistics point of view are the inflows and outflows to/from your warehouse.

This is an area worth keeping an eye on and I expect to revisit it once I know more about the company and their customers.

On a lighter note… $5M to manage the inventory of major businesses vs. $50M to superpoke FaceBook users… am I the only one sensing imbalance here? smile_wink

Update: No, apparently I am not the only one… Will Price, Managing Partner at Hummer Winblad Venture Partners:

It way well be that Slide raising $55m from mutual fund companies at $500m+ pre-money will be the “what were we thinking” moment of the current cycle. I think, however, the investor who leads a $4 on $4m Series A in a company with a differentiated technology and a direct tie to hard ROI will feel calm in the storm.

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Dream Job for a Software Marketing VP @ Atlassian

Atlassian, a fast-growing, successful enterprise software company is looking for a VP of Marketing. I don’t normally broadcast job searches here, but am breaking that rule now for I believe this is a truly exceptional opportunity with a truly exceptional company. (Disclaimer: I have no business affiliation with Atlassian, but admit to being positively biased, as the company exemplifies a lot that I stand for.)

They are best known for two products: Jira, the issue tracking & software project management application was their first hit, putting the company on the fast growth track and establishing a loyal fan-base in the IT community.  Their existing reputation in the IT community certainly helped the second product, Confluence, the enterprise wiki gain traction: it is now equally popular in the IT and business community.  Wikis in general  have become more commonly known in the past two years; once a tiny market niche, today a growing field where new entrants pop up left and right, claiming to be best in this and that….  But numbers talk, and the verdict is clear: Confluence is the undisputed enterprise wiki market leader. 
Atlassian is not sitting on their laurels: in the past year they diversified, acquiring several companies and launching new products on their own.  Frankly, I lost track, but I believe  their portfolio currently includes 8 products, all part of an “IT toolkit”, with the exception of Confluence, which is seeing fast adoption amongst business users, too.  

The customer list is impressive: IBM, HP, SAP, Citigroup, Boeing, BMW, Shell, McDonalds, Pfizer … just about all the Fortune 1000, as well as non-profits, Universities, Government Agencies, totaling over 9000 customers worldwide. (The chart is a bit misleading: Atlassian’s fiscal year starts in June, and the FY08 bar shows the current figure only, excluding projections.)

How did they achieve this?  They must have an excellent sales force.  Wrong! Atlassian has no sales force at all.  They don’t sell: customers simply buy their products on their own.   I often talk about  the pull-model that’s replacing the traditional, expensive enterprise sales process (6-9 months, high touch, flights, meetings, wine-and-dining, entertaining, in the end often nuked by politicssmile_baringteeth) – but that’s typically in the context of Software as a Service, and in the SMB (small business) market.  Atlassian’s products are mostly on-premise (although they now have a hosted version of Confluence) and their primary market is the large Enterprise.  Yet they pulled off what amounts to a small miracle:  essentially took the download.com, tucows style model we all know as consumers, and ported it to the enterprise space. 

Of course having customers try-and-buy through the Internet is not as simple as firing your Sales team ( or not hiring one).  It’s not a matter of a decision: it’ s a consistently applied philosophy, that you have to implement in every aspect of your business.  The key components are:

  • lightweight software
    • well-defined function set, meets specific user need, small user groups can get started
    • ease of use (both easy to learn and easy to use)
    • well documented, well supported
  • transparency
    • features (what you’re getting, no surprises)
    • issues (Atlassian’s bug tracker is open to the public)
    • pricing (simple, upfront pricing, no fill-out-contact-form-wait-for-sales-to-call-back BS)
  • low price (“expensable, not approvable” – to quote a former competitor)

The “pull-model” means customers will need to find you- which is why Marketing is a critical function.  With Sales gone, Marketing becomes sales (actually, Atlassian’s CEO proudly says everyone is in Sales, especially Support).  So if you are a marketing superstar,  or know one, want to be part of a successful team, work for celebrities , you owe it to yourself to apply.

Atlassian is not only about business – it’s about people.  I know, old cliche.. but here it works.  The unique culture this team maintained throughout their super-growth even now that they have 130 people is a large part of their success.

So what is this culture like?  Tough. When he doesn’t make his numbers, Atlassian President Jeffrey Walker is forced to make up for it as ticket-scalper on the street. smile_omg OK, joke apart, this photo was shot last August, when the entire San Francisco office went to see a Giants game together. (Incidentally, just a day before Jeffrey became cancer dude). This wasn’t a rare occasion, either: both the San Francisco and the Sydney teams have a lot of fun together:  Cutlassian, Mission: Atlassian, theme-filled staff events, abound throughout the year.   Their new office  building in Sydney is right next to a pub (hint: when will you guys realize you’d be better off buying the entire pub?beer)  I wonder when the San Francisco office will move into a winery…  Perhaps you get the picture by now: Working for Atlassian isn’t just a job  – it’s a lifestyle.  But don’t for a minute think it’s a bunch of rowdy kids having fun only:  they bring in $30 million a year.  And if you don’t perform, this is what awaits you.

So that’s the magic formula: combine business success with a fun, team-focused culture and you’ve got the makings of the ultimate job.  (Are you still reading, or have you alerted your Marketing superstar friend yet?)

Now, if this is the ultimate job, there’s one question unanswered: How come it hasn’t been filled yet?  I wanted to hear the answer straight from the horse’s mouse so to speak, so I asked Atlassian President Jeffrey Walker, who responded below:

We were inundated with resumes, and found a few excellent capable candidates. Unfortunately, one of the growing pains of companies like ours is we were not quite ready for the right candidate. Incorporating someone of the caliber we need takes preparation. Our search began prematurely. Lesson learned. After the founders and I took another few ‘long walks’, we came out aligned and ready. This time I fully expect to complete the search. Just need the right remarkable individual.

Well, I did not walk with Jeffrey and the Founders, but I certainly hope they will not change a lot:smile_wink.  I have a lot to say on the subject of hiring, but it’s not specific to Atlassian, so I’ll break it out to a separate post.  In the meantime, if you are that “remarkable individual”, what are you waiting for?

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Will Google Enter the Business Applications Market?

Google’s next killer app will be an accounting system, speculates Read/WriteWeb. While I am doubtful, I enthusiastically agree, it could be the next killer app; in fact don’t stop there, why not add CRM, Procurement, Inventory, HR?

The though of Google moving into business process / transactional system is not entirely new: early this year Nick Carr speculated that Google should buy Intuit, soon to be followed by Phil Wainewright and others: Perhaps Google will buy Salesforce.com after all. My take was that it made sense for Google to enter this space, but it did not need to buy an overpriced heavyweight, rather acquire a small company with a good all-in-one product:

Yet unlikely as it sounds the deal would make perfect sense. Google clearly aspires to be a significant player in the enterprise space, and the SMB market is a good stepping stone, in fact more than that, a lucrative market in itself. Bits and pieces in Google’s growing arsenal: Apps for Your Domain, JotSpot, Docs and Sheets …recently there was some speculation that Google might jump into another acquisition (ThinkFree? Zoho?) to be able to offer a more tightly integrated Office. Well, why stop at “Office”, why not go for a complete business solution, offering both the business/transactional system as well as an online office, complemented by a wiki? Such an offering combined with Google’s robust infrastructure could very well be the killer package for the SMB space catapulting Google to the position of dominant small business system provider.

This is probably a good time to disclose that I am an Advisor to a Google competitor, Zoho, yet I am cheering for Google to enter this market. More than a year ago I wrote a highly speculative piece: From Office Suite to Business Suite:

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 at SMB’s.

The difficulty for Zoho and other smaller players will be on the Marketing / Sales side. Many of us, SaaS-pundits believe the major shift SaaS brings about isn’t just in delivery/support, but in the way we can reach the “long tail of the market” cost-efficiently, via the Internet. The web-customer is informed, comes to you site, tries the products then buys – or leaves. There’s no room (or budget) for extended sales cycle, site visits, customer lunches, the typical dog-and-pony show. This pull-model seems to be working for smaller services, like Charlie Wood’s Spanning Sync:

So far the model looks to be working. We have yet to spend our first advertising dollar and yet we’re on track to have 10,000 paying subscribers by Thanksgiving.

It may also work for lightweight Enterprise Software:

It’s about customers wanting easy to use, practical, easy to install (or hosted) software that is far less expensive and that does not entail an arduous, painful purchasing process. It’s should be simple, straightforward and easy to buy.

The company, whose President I’ve just quoted, Atlassian, is the market leader in their space, listing the top Fortune 500 as their customers, yet they still have no sales force whatsoever.

However, when it comes to business process software, we’re just too damn conditioned to expect cajoling, hand-holding… the pull-model does not quite seem to work. Salesforce.com, the “granddaddy” of SaaS has a very traditional enterprise sales army, and even NetSuite, targeting the SMB market came to similar conclusions. Says CEO Zach Nelson:

NetSuite, which also offers free trials, takes, on average, 60 days to close a deal and might run three to five demonstrations of the program before customers are convinced.

European All-in-One SaaS provider 24SevenOffice, which caters for the VSB (Very Small Business) market also sees a hybrid model: automated web-sales for 1-5 employee businesses, but above that they often get involved in some pre-sales consulting, hand-holding. Of course I can quote the opposite: WinWeb’s service is bought, not sold, and so is Zoho CRM. But this model is far from universal.

What happens if Google enters this market? If anyone, they have the clout to create/expand market, change customer behavior. Critics of Google’s Enterprise plans cite their poor support level, and call on them to essentially change their DNA, or fail in the Enterprise market. Well, I say, Google, don’t try to change, take advantage of who you are, and cater for the right market. As consumers we all (?) use Google services – they are great, when they work, **** when they don’t. Service is non-existent – but we’re used to it. Google is a faceless algorithm, not people, and we know that – adjusted our expectations.

Whether it’s Search, Gmail, Docs, Spreadsheets, Wiki, Accounting, CRM, when it comes from Google, we’re conditioned to try-and-buy, without any babysitting. Small businesses don’t subscribe to Gartner, don’t hire Accenture for a feasibility study: their buying decision is very much a consumer-style process. Read a few reviews (ZDNet, not Gartner), test, decide and buy.

The way we’ll all consume software as a service some day.

Update: As an aside, the Read/WriteWeb article that inspired this post demonstrates the “enterprise software sexiness” issue, which was started by Robert Scoble and became a Firestorm, per Nick Carr. I really think it’s a very thoughtful post, which, quite unusually for Read/WriteWeb sat alone at the bottom of TechMeme, then dropped off quickly. Now, has this not been about Accounting (yeah, I know, boring) software by Google, but, say adding colors to Gmail labels, in the next half an hour all the usual suspects would have piled on, and this would have taken up the top half of TechMeme. smile_sarcastic

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SaaS Will Never Be the Same – Again

The first time I said SaaS would never be the same was referring to Freshbook’s launch of their benchmarking service:

It’s *the* hidden business model enabled by SaaS. An opportunity not talked about, but so obvious it has to be on the back of all SaaS CEO’s mind. Benchmarking is a huge business, practiced by research firms like Forrester, Hoovers, Dunn and Bradstreet, as well as by specialized shops like the Hackett group – none of which are affordable to small businesses. More importantly, all previous benchmarking efforts were hampered by the quality of source data, which, with 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.

Hosting customer data offers a lot more opportunities, beyond benchmarking. Tomorrow CRM provider Salesforce.com will launch a new service called Salesforce to Salesforce (S2S) that facilitates the sharing of data between customers -reports TechCrunch. I believe, just like Freshbook’s move, the ramifications of this new Salesforce service will go way beyond the immediate opportunities it brings to customers ( not that those are negligible: see first reaction by Echosign CEO Jason Lemkin, another business innovator in my book.)

This is a first step in a paradigm-shift: while current concerns about SaaS mostly focus on the security, privacy, and consequently isolation of business data, eventually a culture of controlled sharing for business benefits will develop. Forget CRM; think of more complete business suites, like NetSuite, or when it really kicks in, SAP’s Business ByDesign, the most comprehensive SaaS business suite ever. Procurement, manufacturing, inventory, resources…etc data – can you envision the improvements in Supply Chain visibility? SaaS will never be the same – again.

Update (12/5): Larry Dignan at Between the Lines sees the same opportunity:

Today, the service is predictably focused on sharing sales lead and CRM-type information. But as Salesforce.com grabs more large customers its possible that the latest service could be used to exchange supply chain information and link other business processes.

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SAP Needs CEO

Picked this up from James Governor’s thread:

battery near dead. how hard is it to have plugs for a room full of influencers? sap events needs a chief electricity officer… 😉

Rest assured, the “other” CEO, Henning Kagermann is well, thank you very much. In fact he just spent a good 40 minutes with the Enterprise Irregulars, and if I had an SD card adapter or a stupid cable with me (I know, how low-tech…) I could post the group photo to prove it.

Update (12/5): More on the Chief Electricity Officer of James’s Green Blog. Oh, and here’s the photo, finally:

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Former SAP Exec Emerges to Deploy Grid for Electric Cars

When Shai Agassi, President of the Product- Technology Group in SAP left the software giant this March, his parting line “to pursue interests in alternative energy and climate change” could very well be viewed as a fashionable update to the old cliche of “leaving to pursue other interests and to spend more time with family”.

But in hindsight it’s obvious Shai knew exactly what he wanted to do next, as laid out in his blog post on Alternative Transportation within days after his departure:

…electric vehicles will become a reality within a short time frame, and will be cheaper to operate within a short time…

The consumer needs to feel comfortable driving an electric car with a ubiquitous charging infrastructure…

The grid needs to support the new load from this moving electrical appliance…

He then goes on defining his future role:

If you followed the history of the introduction of electricity through the first appliance – the electric light bulb – you know that there were three main players in the story: Edison, Tesla and Westinghouse…

…Tesla invented most of the essentials for the common grid we know and love today. The guy who deployed it in mass scale though was Westinghouse, which is the role we need in this new electric revolution – the business guy who deploys with the highest efficiency and best business approach. If Tesla Motors are the modern day Tesla, my hope is to play the role of Westinghouse, or some small part of that role.

Half a year later Shai re-emerged, launching Project Better Place, a company funded to the tune of $200M, which intends to deploy the infrastructure needed to support electric vehicles.

Project Better Place wants to create the grid of recharge and battery exchange stations, and here comes the interesting part: they want to follow the mobile phone industry’s business model, offering subscribers to the grid subsidized cars that are “cheaper to buy and operate than today’s fuel-based cars”.

I’m sooo ready for a subsidized Tesla smile_regular

Update: Now that there’s a conversation going on about HaaS (Hardware as a Service), I’m going to declare the Shai-mobile CaaS: Car as a Service. smile_wink

Update: Watch Shai on CNBC, first live in the studio, then I believe remotely. Wonder why he put on a tie for the second round…perhaps Thomas knows(?)

Gotta love this quote:

This is not a science project. This in an integration project.

Related posts: WSJ ($), Green Car Congress, New York Times, Green Wombat, Crunchgear (calling Shai “some guy”), isRealli, Earth2Tech, Business Week, alarm:clock, Between the Lines, Techdirt, Babbling VC, VentureBeat, All Tesla Motors Blogs , The Energy Blog,

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Enterprise Bloggers, Openness and a Thriving Ecosystem

I started this post a week ago, than canned it, not wanting to be part of the “storm in a teacup“, created by Oracle’s announcement that they would open up their annual OpenWorld conference to bloggers for the first time. The software giant also actively reached out to 30 or so bloggers, including several of my fellow Enterprise Irregulars.

It appears that most EI’s will not attend, partly since Oracle does not pay for expenses, partly because there is no word about access to Executives. More important than the expense issue was the reasoning:

“We’re not picking up travel costs or expenses, sorry. This will keep you impartial. If you see me, I’ll give you a pat on the back, how’s that instead?

Ahhh…the enterprise bloggers must be a bunch of prima donnas, used to getting their full expenses paid at SAP’s annual conference and other events.. SAP “bought them” and they are biased, right? Wrong.

The reality is that unlike the press and analysts, the group bloggers are often lumped into, may of us are independents or are in small businesses, don’t have corporate expense accounts to lean on, and simply can’t afford to travel to conferences on our own. Even on a fully reimbursed trip, taking 3-4 days off business is a significant sacrifice. Of course that’s the bloggers’ side, why should Oracle care? Whose loss is it anyway?

What does SAP get for the not-so-negligible travel budget they spend on enterprise bloggers? The one thing they don’t get is bias, “loyal”, positive reviews.
Fellow irregular and ex-Gartner Vinnie Mirchandani can hardly get more critical, regularly beating up SAP on issues like pricing, maintenance, innovation (or lack of) – yet he is invited back to all SAP events. Fund Manager, former SAP investor and blogger Jason Wood is also a regular at SAP events, which certainly does not prevent him from expressing his doubts / concerns. Dennis Howlett is no exception, and the list could go on.
SAP’s recent announcement of their new hosted SMB solution, Business ByDesign is another good example. While most of the media reprinted SAP’s press release, you won’t find it anywhere in the “enterprisey” blogs: what you will find instead is independent thinking, analysis (right or wrong) and dialogue. The bloggers’ verdict was generally positive, mostly about the feature set/ technology, but several of us expressed doubt regarding execution: SAP’s market segmentation, potential self-cannibalization, ability to create mobilize a new, agile ecosystem capable to profitably execute in the new high volume/low price model, and help SAP reach their market goals.

Not exactly paid-off, loyal PR if you ask me… could it be that SAP knows something about the value of dialogue, in fact outright debate? They go the extra mile to provide bloggers with information, engage them actively. Round-table discussions with Hasso Plattner, Henning Kagermann, Leo Apotheker, Peter Zencke (did it all start with Niel’s chance encounter with SAP’s CEO?) and several other executives are highly appreciated, and believe me, it’s not one way PR-style briefing either. James ‘Redmonk” Governor says it best:

“As I have said before, you can buy my thinking, but you can’t buy my opinion.””

At SAP’s Teched 07 Conference James publicly disagreed with Peter Zencke about market segmentation, and the world did not come to an end; in fact the SAP Board Member happily continued the debate at the bloggers chat afterwards. Two weeks after the “incident” James moderated several sessions at Teched Europe, on SAP’s invitation. Don’t we all know companies where such behavior is the sure way to lose access and get yourself uninvited forever?

Bloggers are critical, opinionated, sometimes right, sometimes wrong, but never dull. But there’s a bigger picture here, other than external communication. I believe it’s not coincidental that the company that understands the power of dialogue has the most thriving online community I’ve seen in enterprise software.

Two years ago, when the external “Bloggers Corner” program started the SAP Developer Network (SDN) counted close to 600K members – today it’s 900K. It’s younger sibling, the Business Process Expert (BPX) network counts 200 thousand members. Between the two, discounting overlaps, it’s fair to say 1 million members participate in SAP’s online communities. This includes blogs, forums, wikis, videos..etc. SDN+BPX is a thriving support system: over 5,500 issues are posted daily, and the average response time is 20 minutes.

I think SAP has discovered something unique: they don’t have to give the code away yet they enjoy the benefits of “Open Source-like community“. The highest rated contributors don’t have to look for projects any more, they are in high demand. SAP Ecosystem Becomes a Booming Economy – declares research firm IDC.

The Ecosystem has become an organic part of how SAP conducts business, and there is no turning back. SAP Executives are quite aware that competitors comb through the SDN / BPX entries daily, and they certainly lose some competitive edge – but there is no other way to “run” the ecosystem. The Genie is out of the bottle, and they don’t want to send him back.

The role of the ecosystem will become even more important now that SAP is more aggressively pushing into the mid-market. This is a high-volume, low-margin market, sales, deployment, support all different from what SAP traditionally knows. Successful partnering will make or break it, and apparently SAP understands it.

I’ve come a long way from the original issue of blogger participation at Oracle’s OpenWorld, and not without reason. This issue has sparked a debate, stirred up some emotions, and I don’t want people to think it’s all about greedy (or hungry) bloggers whining about not getting their expenses paid. Nor is it a SAP Good Guy, Oracle Bad Guy issue. Both companies have their own culture and will continue conducting business their own ways.

I believe Oracle’s first approach to bloggers (late or mistaken as it is) is a welcome move, and it’s good to see they are open to learn and improve:

“This is new territory for a lot of us, and personally, I’d like to hear a lot more opinions and suggestions before I support one path or another.”

Some people in Oracle had to fight for this and they should not be given a (verysmile_wink) hard time. I certainly hope the initiative will not get shut down due to the initial negative feedback. I also hope Oracle management will realize how one step leads to another and that openness actually improves business in the long run. I used SAP as the positive example, because that’s the best showcase I know, and they are pioneering in this field – but if you know any other examples for actively embracing community, please share it in comments below.

Oh, and if you happen to be in the San Francisco Bay Area, by all means, check out Lunch 2.0 @ Oracle tomorrow.

Update (10/24): …and not a happy update, for that matter. Just as I praised SAP for “getting” social media, here’s this disturbing post from Steve Mann, VP at SAP’s Global Marketing. Apparently SAP HR wants him to remove the link to his personal blog from his corporate signature. I guess I should correct my statement: SAP gets social media … just not everyone, all the time smile_sad

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A Confluence of the Wiki and Document/Folder Worlds

Merriam-Webster:

confluence

1: a coming or flowing together, meeting, or gathering at one point <a happy confluence of weather and scenery>

2 a: the flowing together of two or more streams

b: the place of meeting of two streams

c: the combined stream formed by conjunction

Today we’re seeing the confluence of two worlds: the flow-oriented thinking and collaboration, represented by Confluence, the market-leading enterprise wiki, and the more traditional approach of documents, lists, folders, represented by Microsoft SharePoint. Or perhaps it’s a right-brain / left-brain thing. I’ve talked about it at length, and since Jeremiah, Web Prophet says backlinking is OK, I’ll just do that, instead of repeating myself: Flow vs. Structure: Escaping From the Document & Directory Jungle.

Now, as important forward-looking visioning is, successful business leaders recognize what the market wants today, not where they’d like to lead them tomorrow. Recognizing that Microsoft Office is deeply entrenched in the corporate workplace, Atlassian first added Webdav capabilities to Confluence (drag-and-drop files into the wiki, single click on attachment to edit them in the original MS Office format and save back to the wiki). But customers wanted more, according to Jeffrey Walker, President:

..meeting with customers and analysts, SharePoint came up in every meeting. “We have growing groups who love the wiki, and long standing users of Microsoft and now SharePoint. Help!”, customers asked..

The result of today’s joint Microsoft and Atlassian announcement of the SharePoint Connector for Confluence. The initial features include:

  • Search: Users can search SharePoint and Confluence content together from one place.
  • Content sharing: From within SharePoint, users can embed Confluence page contents allowing users to blend content. This also includes Confluences numerous plugins.
  • Linking: Within Confluence, users can access SharePoint document facilities. By including SharePoint lists and content within Confluence, users, in a single click, can edit Microsoft Office documents.
  • Single Sign-On and Security: With one login, users can access both systems while seeing only what they have permission to view.

In short, access your information, whether you’re the wiki-flow type or the create-save-hide-in-folders type smile_wink

The screenprint above shows a Confluence page (with the charting plugin) embedded within, and editable directly from SharePoint. For more, check out the feature tour.

Jevon MacDonald is pondering about the business realities behind this deal:

The question that weighs most heavily is: is there enough incentive for Microsoft to participate in this partnership in any significant way? The immediate economics aren’t obvious for Microsoft, which leaves us with two options:

– but I’m not giving those options away, you’ll have to read his post. (as an aside, he is the only one examining the business side, but his post is not on TechMeme – let’s see if we can push it theresmile_sarcastic)

Speculation aside, some numbers: SharePoint has 80 million users while Atlassian Confluence has 4,100 customers – I don’t know how many users that translates to, but I’ve just written about SAP’s SDN/BPX communities which has about a million (!) users, and Confluence is a significant part of it. That said, Jeffrey said it right, David kisses Goliath in this deal.

There is no marketing agreement behind it, but I wouldn’t be surprised to see Microsoft’s huge reseller channel show interest in Confluence. And frankly, just removing the “we’re a SharePoint-shop” political obstacle in some major enterprise client is worth it alone.

Sour grapes? Competitor Socialtext announced their SharePoint integration a year ago, and CEO Ross Mayfield says SharePoint wiki was last year’s news. Well, I think Socialpoint, the Socialtext/SharePoint integration was last year’s news, this year’s news is Confluence.

Perhaps next year’s news will be which enterprise wiki vendor could translate their deals into real market gains. smile_shades

Update: here’s a video interview with CEO Mike Cannon-Brookes and President Jeffrey Walker on ScobleShow.

HOT! EXCLUSIVE! Here’s the real price Mike had to pay for this deal… just compare his looks above with this video. What’s next? A suit and tie? smile_tongue

Related posts: Read/WriteWeb, Computerworld, Don Dodge, Atlassian News, WebProNews, Between the Lines, Ross Mayfield’s Weblog, Irregular Enterprise, Radiowalker, elliptical , eWEEK.com, Socialwrite, Trends in the Living Networks, Rebelutionary.

Update (10/19): Intriguing thoughts on wiki plug-ins, KM Web-services and Enterprise SOA on – surprise, suprise! – the SAP Community Network

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