November, 2008

  • November 26, 2008
  • I have in my hot little hand a two-page handout that I got at the recently concluded Dreamforce 2008 event in San Francisco.  With all the excitement about the election and the economy as well as this day job I have, I had not really taken the time to peruse it. 

    A quick glance a couple of weeks ago told me that the company had added a new color, blue, to its logo but closer inspection reveals that it isn’t just the color, there’s another logo all together.

    The title of this document is “Salesforce.com New Branding at a Glance October 2008” and it is the work of the clever and talented Jane Hynes.  The import of the doc, beyond the familiar logo–now with a blue theme for the “no software” tag line–is in the copy.

    The new logo belongs to Force.com, which is the ultimate evolutionary branch (so far) in Apex, S-force and who can remember what else.  The most interesting thing to me is the first sentence—“Salesforce.com is the enterprise cloud computing company.”  Executives at the company told me that despite this statement, there is no attempt to de-emphasize CRM.  How could there be? 

    CRM is what pays the bills and what built the company but there’s a bigger point being made too.  The platform and CRM cannot be separated and if anything the applications form the basic armature around which everything else is built.  Platform, however, is the future of computing and that needs to be pointed out.  Companies grow, evolve, mature, change and all the rest, and Salesforce.com is evolving too.  It makes perfect sense if Force.com is the future of the company—and maybe even the future of computing—that this inversion of rank takes place.

    The timing is probably very good for this company too, if you consider what’s happening in the greater economy.  As I have often said, it’s hard to be in an inflection point moment and to know it; often it is only in retrospect that the inflection point becomes clear.  Take it form me though, with the economy tanking because credit is tightening, we are certainly in a major inflection point right now.

    The importance for Salesforce.com and its customers and prospects is that adjusting to the new world—forming at the intersection of recession, Peak Oil and a renewed sense of public purpose made evident by the election—will require new software to support new business processes.  Lots of new business processes. 

    If you follow this space you might recall a recent piece suggesting that vendor financing for some businesses makes sense but that there is no commercially available software to support such a process.  If I am right (and that is always suspect), companies everywhere will be innovating small credit applications to keep their businesses competitive. 

    Historically such applications were developed in spreadsheets but going forward there’s a reasonable chance that at least some companies will choose to develop credit applications using the same data and tools that make up their sales systems.  Of course, credit is just one example, but my thinking is that in an inflection point moment, when everything is changing to one degree or another, we will need software to pave over the new business processes that inevitably spring up.  In that context, making Force.com stand on its own makes good sense.

    Even looking at the slogans under the two logos gives a hint of past and future.  For Salesforce.com it’s “Success. Not Software” which harkens back to the early years of this decade when the big challenge was simply deploying Windows based client-server CRM.  Force.com’s message is all about the future, “Dream. Build. Succeed.”  You notice that the notion of success is baked into each but you can’t help but figure that Force.com is aimed at a bigger stage.

    Published: 15 years ago


    We are rolling out the annual WizKids survey and report building process right now.  Due to popular demand, our web site has all of the details and forms you need to enter the contest to see which companies will be selected for 2009.

    As in the past, we will review all of the entries submitted by December 30, 2008 and select the most interesting companies and their customers to profile in our report.  There is nothing to buy and no way to influence our judges other than to fill out the form which you can get at www.BeagleResearch.com.  

    We hope you will enter and please, don’t be late!

    Published: 15 years ago


     

    As I have previously written in a blog post, Sage held its end user summit in Denver this week.  It was a large meeting made to look a little small by the cavernous Colorado Convention Center but there were lots of well attended courses for all of the accounting and CRM packages the company rides herd on.  There was also a good show floor, which I would equate with the Salesforce.com partner exhibitions.

    In this last post on the Summit I want to focus on what I think is the key difference between Sage and its rivals.  The company has done pretty well selling through a reseller channel that consists of many entrepreneurs each supporting one or more of the company’s accounting and CRM products.  As you know, the company focuses on the SMB space but there is no small supply of customers that exceed that designation at the high end.

    I was impressed by the number of people I met at the show who worked in the petrochemical industry and used Sage’s accounting and CRM applications.  Maybe it’s me but I don’t usually associate SMB and petrochemicals or global presence and that says a lot about Sage and its partners.

    It all came together for me at the first annual customer awards ceremony.  Thirteen companies were recognized for excellence in a variety of categories–including the non-profit sector—for using Sage products.  Two companies stand out in my mind.

    Metrolina Greenhouses, Inc. of Huntsville, NC is 25 years old and grew from almost nothing.  Today they employ 425 people with an additional 100 added for the busy spring and fall seasons.  The company grows plants that are sold at home improvement stores from Maryland to Alabama. 

    MRP, ERP and EDI are the major applications that Sage supplies through partner, Practical Software Solutions.  This operation is so big that it takes orders through EDI and needs MRP to help track and order things like pots and potting soil.  But also, and I don’t understand all the nuts and bolts here, the company has to deal with issues like replenishment, tracking trucks and scheduling.  It all used to be done with 200 MB spreadsheets but now it’s a real system integrated with

    They say that in 1999 greenhouse and nursery-grown plants surpassed tobacco as the North Carolina’s biggest cash crop with sales now topping over $1 billion.  I have no idea what Metrolina’s revenues are but this sure doesn’t look like a typical SMB to me.  Congrats to them and to Practical Software.

     

    Rex Moore Electrical Contractors and Engineers, Sacramento, CA, is really a great story.  Four generations of the family have run the company dating back to the original Rex Moore who started the business in 1922 in his basement.  At the inception the company did electrical maintenance but with a new generation and an electrical engineering degree, they broadened out to all phases of electrical construction and electrical engineering.

    Beginning in 1980 the company computerized and it has stayed with the same product, Timberline, for all that time.  It has used primarily back office applications to manage the books, create correct invoices and keep its overhead low.  Most impressively the company has grown from $2.5 million to over $140 million in revenues in that time. 

    We tend to focus only on the biggest companies with the best PR departments and sexy products but there are a lot of stories like these all over the industry.  They give credence to the notion that small business is the backbone of our economy and they should give inspiration to anyone with a dream of starting a business, regardless of the economic climate. 

    You can learn more about the Sage Customer Awards here.


     

    Published: 15 years ago


     

    It was just a matter of time before businesses started to respond to the financial meltdown with some creativity and as usual, the biggest advantages will go to the early movers.  I have been noodling on several convergent ideas recently and they seem to be taking shape in the marketplace, but in some quarters where you might not expect innovation or creativity.

    Exhibit one is the return of layaway in retail.  People of a certain age and background, myself included, can remember perhaps only vaguely the concept of buying something at a retail store and leaving it there while you paid for it over a few months.  Layaway was replaced first by store credit cards and then by general-purpose credit cards – more on that momentarily.  

    Back in the day, most people got paid weekly and in cash and it was pretty common practice to march down main street with cash in hand to pay various bills.  I can remember my mom trundling us downtown for errands like this to pay electricity (she still called it the light bill), phone, the mortgage, which was held at the corner bank.  There were various and sundry other stops too, which often included the local retailer who was holding something special.

    In the wake of too many supposed adults pretending that real money was the Monopoly variety we find ourselves again tapping into this source of financing by other means.  Last month Kmart reintroduced layaway to its stores just in time for the holiday shopping season.  Target and Walmart said they have no plans to follow suit but I wonder which chain will have the best numbers in what is shaping up as a tough season.

    Layaway, or as I like to call it, finance by other means, is a perfectly reasonable response to tight credit and it offers vendors and customers several advantages.  For customers there is the obvious, the ability to make a purchase that would otherwise not be possible assuming the credit cards are maxed or you just want to avoid debt, a good idea these days. 

    For vendors though, the advantages are more numerous.  For instance, self financing might be more profitable in the long run and it certainly keeps the cash flowing—perhaps trickling—when it could easily stop all together.  Most importantly, to me though, is this: when credit cards began to replace layaway, customers discovered their credit was good anywhere and the bonds between vendor and customer that were once strengthened by layaway evaporated.  Vendors of all stripes have searched a long time for something as effective at building customer loyalty and they have come up short.

    A version of finance by other means took root in the technology markets about ten years ago.  It was spawned by the idea that you could purchase software–and the infrastructure that backs it up—by the month rather than through a massive license. 

    In good times on-demand (a.k.a. SaaS) vendors touted their ease of use, ubiquitous access and simplicity of installation as their drawing cards but I am betting the sector will be all over the low cost aspect too very shortly. On-demand is not the only option though, especially in technology.  A case in point, last week Microsoft announced a zero percent financing offer to customers making purchases of Microsoft Dynamics application suites.  There are some conditions but it’s a pretty good and creative offer and who would have expected Microsoft to do something like this?  Makes perfect sense though so hats off to Microsoft.

    Now here’s the real issue.  Vendor financing or financing by other means is a reality.  Early movers are already taking steps to bring this new/old service to market, but what are they going to use to manage this business process?

    When my mom took us down to Main Street to pay our bills, there were file folders and journals everywhere you went.  Putting five dollars on the retailer’s account?  Very good, let me look that up!  It was a completely paper based process—and here’s the important part—the process was given up long enough ago that there is no automation available to support it.

    I smell opportunity here.  Interestingly, even if you are in the on-demand business, even you might be using billing and payment processing technology that is not ideal for you.  Billing systems built for conventional business may not offer the flexibility to enable payment over time. 

    When Zuora was launched earlier this year its focus was specifically on the SaaS vendor.  The company has done pretty well expanding rapidly and attracting attention from would be customers, partners and analysts like me.  However, my point is that there is nothing Zuora-like that addresses the broader emerging market for billing and payment systems that support the new-again business process of vendor financing.

    Here’s a bigger question—is this a front office or back office application?  You can make a case for both and at some point it might not matter and in the end it probably doesn’t matter.  Isn’t it interesting though how the recent adversity in financial markets has caused vendors to adjust?  It is just a matter of time before the software industry begins to respond.

     

    Published: 15 years ago


    Denver Colorado—Where’s the snow and the cold weather?  All I see is snow capped mountains and snow fences near the highway to remind me that I’m at least a month too early.  That and about forty degrees, it’s seventy here, bright, sunny and beautiful so I am not complaining.

    Really though, what a nice city.  The big bright sky and the building facades give an impression of the WPA and the 1930s—not a bad thing at all.  And did I mention friendly people? I am from the east coast and confused but no matter, I am at the Sage Summit, an appropriately named customer meeting in this city.  It looks like Sage has pulled out all the stops to make this an event to compare with Dreamforce and OpenWorld—seems like all the shows are all trying to say something positive about their companies’ success and their optimism for the future.  Given the state of the economy and the stuck financial sector I hope this isn’t something that will look out of step in the months ahead.  I choose to be optimistic regardless.

    Sage has decked out the Colorado Convention Center for the occasion its customers are taking courses from a catalog that’s as thick as something I remember from university days and vendors are hosting sessions and the trade show floor looks big and well attended. 

    Customer Award Program

    I love awards, especially those that focus on technology achievements in business.  This year Sage inaugurated an awards program to recognize excellence in numerous categories among its partners and their customers.  Awards like this are a chance to make everyman a hero and to focus attention on the good work that gets done in the SMB market, often without notice by the outside world.  When you consider that small business is the engine of growth in America and probably everywhere the sun shines, you might think there would be greater attention paid. In the interest of full disclosure, I have to admit that I played a small part in judging the entries and they were pretty interesting.

    As you no doubt know, Sage produces multiple lines of accounting and ERP applications as well as several CRM applications that help SMB’s to compete in the marketplace against larger rivals.  What makes Sage unique is that they sell everything through a reseller channel.  Other guys employ direct and indirect channels and deal with managing conflict but Sage said “thanks but no thanks” to that a long time ago and made a commitment to make the channel work and they have. 

    As a result, when we talk about ERP and CRM vendors many of us skip over Sage simply because they are the exception.  That lack of attention doesn’t seem to hurt them though and it almost gives Sage a kind of stealth quality that the company and its resellers have perfected in the sales process.

    But back to the awards.  Sage developed a bunch of categories and picked some of the leading resellers and their solutions for us to judge.  I have to say that for many categories it was hard, there were several high quality implementations that could be winners.  That’s the down side of this kind of thing, you can only pick one, or as we did you score them on their merits.  So here’s what the judges came up with and this is cribbed from the press release:

    Best Innovation Awards

    • R.S. Quality Products, Inc., Allentown, PA, the Accounting Solutions-Small Business winner, using Peachtree by Sage, and ACT! by Sage;
    • Bazaar & Novelty Ltd., Vancouver, B.C., Canada, the Accounting Solutions-Mid-Market winner, using Sage Accpac ERP and SageCRM (Sage Accpac Extended Enterprise Suite);
    • Delta Dental of Oklahoma, Oklahoma City, OK, the CRM Solutions winner, using Sage SalesLogix;
    • Broadband Specialists, Inc., Balch Springs, TX, the Construction and Real Estate Solutions winner, using Sage Timberline Office, and;
    • Rogue Valley Council of Governments, Central Point, OR, the Nonprofit Solutions winner, using Sage MIP Fund Accounting.

    Rookie of the Year

    • Hotels Unlimited, Inc., East Windsor, NJ, a Sage MAS 500 ERP customer.

    Best End-to-End Deployment

    • Trinity Manufacturing, Inc., Hamlet, NC, using Sage MAS 500 ERP, Sage Abra HRMS, Sage SalesLogix, and Sage FAS.

    Best Use of Customization

    • Metrolina Greenhouses, Inc., Huntersville, NC, a Sage MAS 500 ERP client.

    Community Stewardship

    • Louisiana Economic Development Department, Baton Rouge, LA, using SageCRM, and;
    • Boys and Girls Clubs of Metro Atlanta, Atlanta, GA, using Sage MIP Fund Accounting.

    Best Use of Multiple Sage Products/Services

    • Cory McFarlane, LLC [formerly Aspirant Development], Tallahassee, FL, using Sage Timberline Office, SageCRM, and Sage Abra HRMS.

    Lifetime Achievement Award

    • Experient, Inc., Twinsburg, OH, using Sage MAS 90 ERP and Sage SalesLogix, and;
    • Rex Moore Electrical Contractors and Engineers, Sacramento, CA, using Sage Timberline Office.

    I hope you have a chance to check these winners out at the Sage website.  One of the things that really impressed me, especially with the lifetime achievement winners is how the companies grew at least in part because they had appropriate software to help owners manage their businesses.

    Congratulations to everyone.

    Published: 15 years ago