January, 2011

  • January 31, 2011
  • Last week Salesforce.com representatives briefed me on the Chatter.com roll out strategy.  They’ve bought a couple of Super Bowl ads and they are working with the Black Eyed Peas’ Will.I.Am to produce the ad.  The whole process is managed by Chatter, naturally.

    In the ads Salesforce will provide a real-life demonstration of Chatter being used to coordinate the creative activities of a swarm of people in San Francisco, Los Angeles and who knows where else to produce the ads.  At their heart, the paired ads will be a use story, working on the Super Bowl project, with the Super Bowl half time entertainers to boot.  Understand one more thing — this is to promote the freemium Chatter product.

    So much to say here.  Remember when companies burned their venture capital on Super Bowl ads just to gain a little altitude in their markets?  The networks got fat and rich on the takings and the companies?  Quick, name a memorable Super Bowl ad from a tech company!  You’ll probably default to Apple’s hammer throwing Big Brother spot from 1984.  Remember that one?  IBM was Big Brother?

    This year a dot com will launch its first Super Bowl ad a dozen years or more after it was fashionable.  Heck, unless I am missing something, this is Salesforce’s first ad period.  In the intervening years, this dot com became a quite sizeable outfit — without burning its cash on a Super Bowl ad, thank you very much, but instead with revenues pushing two billion bucks (imagine if that represented licenses instead of pay by the drink SaaS).  Not only is Salesforce spending its own money on the promotion, it isn’t even promoting its first product.  Chatter is the first product of the company’s next act but it long ago proved its chops.

    To me this gives resonance to the idea of “all-in” a term another vendor is using to highlight its commitment to the big technology wrinkles of the last decade.  But all-in should be about a big gamble and a decision to risk greatly based on the soundness of one’s vision, products and people.  All in ought to be about the future, not the past.

    At this stage, buying a Super Bowl ad is no big deal for a company like Salesforce beyond the fact that the company simply doesn’t buy ads to promote itself.  The money is no factor.  In the last year Salesforce has paid out many millions to acquire other companies and just under $300 big ones to buy the land to build its corporate headquarters on.

    I can’t wait to see what they do for the ads — as I understand it, there will be two sandwiching the halftime show — but one thing is clear.  In keeping with its history of disruptive innovation, Salesforce’s halftime ads might also disrupt bathroom break habits and many people might decide to “hold it” through halftime.  There may even be enough interest in 415, 650 and surrounding area codes to affect water pressure readings during half time.  Someone should get last year’s readings and compare year over year just for fun.

     

    Published: 13 years ago


    Looks like the revolution will not be socialized, at least not the one smoldering and catching fire in Egypt.  Late yesterday the Egyptian government cut Internet connections first to the social networks and then to the whole dam Internet itself according to a story by Steven J. Vaughan-Nichols on ZDNet.

    The implications are fascinating and enormous.  In the old days, and I suppose even now — though I don’t want to test the hypothesis — when a country went to war one of the first things it did was to sever relations with and recall its ambassadors to its opponent.  Ironically, Egypt is recalling its connection with the rest of the world, turning its citizens into captives.  Can you really make captives of a whole country?  Unfortunately, yes.  And without the Internet there are fewer witnesses.

    One of the logical conclusions I am forced to is that the authorities are ready to crack down and declare martial law, though in Egypt, a one party thug-tatorship, one wonders how martial law differs from the quotidian.  The crazy specter of a government at war with its citizens looms ahead.

    One of the mistakes the Iranians made a couple of years ago was leaving the Internet mostly alone.  The ‘net proved a powerful window into that troubled society and perhaps that window limited the carnage of the government crackdown.  So far Egypt looks more like China circa 1989 and Tiananmen Square.  That was bad but at least we could preserve the smug assumption that the Chinese were to some degree Communist adversaries.  In contrast the Egyptians are supposed to be allies.

    What does it say that our ally is a one party state with a president who’s set a world record for re-election and who is preparing to pass on the “elected” office to his son?  Ironically, that part of the world gives us too many examples of broken government.  Iranian theocracy represses people and doesn’t work. Egyptian democracy represses people and doesn’t work.  Saudi and other monarchies in conjunction with religious conservatives repress people and are barely functional if only because they have more ruthless police.  It’s no wonder the middle east is a smoldering cauldron.

    They say freedom and democracy are messy but compared to what?

     

    Published: 13 years ago


    Well, this is interesting.  Today NetSuite announced a Renewal Management offering for its Software Company Edition.  The module is aimed at supporting recurring revenue management, a heretofore ignored need for the growing legion of software as a service companies.

    The product appears to be NetSuite’s answer to solutions from players like Zuora and Aria who specialize in billing and related processes.  When billing was a relatively rare thing — the annual maintenance bill or the one-time license fee, conventional billing software was fine.  Billing for software was just like billing for a piece of hardware.

    But then software turned to on-demand and suddenly customers had the ability to change the constellation of products and services they consume between billing cycles.  When that happened billing complexity increased twelve-fold.  The general-purpose vendors like Zuora handle all that nuance and more.  Anything that can be subscribed to for a fee is fair game for a subscription billing system.  So my bet is that NetSuite is dipping a toe into the water and will have other subscription goals in the future.

    On a related note, maybe I am seeing things but this is another piece in a puzzle that looks like a new emphasis on revenue.  Typically, when revenue’s importance rises  vendors try to handle it through sales tools.  This is different, it’s more about collecting than net new business and what I am seeing relates to billing, as here, but also revenue performance management (RPM).

    This is just my guess because there’s no centralized group calling signals but it looks like the industry is renewing its emphasis on cash, perhaps in a response to the recent recession.  The precipitating event of the recession, or one of them, was the lack of credit to enable mundane transactions to go on.  Having or developing systems and processes that let an organization be more in control of its finances says to me that conventional bankers might find it less easy to do business with their best corporate customers in the future.

    In fact, a niche that’s gone dormant that I have written about before —vendor financing — could be coming back to life.  It makes sense too.  Before there were general-purpose credit cards and other bank related forms of unsecure credit, there was vendor financing.  It took many forms like a revolving account that you were invoiced on monthly or perhaps a less sophisticated layaway plan.  Regardless, the vendor did the financing and collected the interest and the banker didn’t get much of that business.

    Eventually, the convenience of bank financing won the day but then the bankers proved unreliable in a big way.  They opted to gamble their assets in Wall Street rather than participate in conventional lending.  It worked for awhile — not even a long time, really — and now the practices have been exposed.  A market opportunity exists in vendor financing.  It will not be satisfied by subscriptions or by individual vendor solutions overnight.  But a gradual accretion of such solutions could spell a surprise down the road for bankers.  Of course, I am not a finance guy, so what do I know.  I just watch the marketplace.

     

    Published: 13 years ago


    This week we profile one of the less well known pioneers of the social revolution, Diane Hessan, CEO of Communispace.  From the beginning Communispace took a different path from conventional social vendors.  Rather than using community as an opportunity to broadcast information, Commuinspace led a revolution in listening to customers.  Listening to customers is underrated according to Hessan.  In her characteristic style she says, “It’s just unbelievable what happens from a marketing point of view if you just shut up and listen…There’s magic to doing that.”

    I don’t under rate her and I invite you to read the whole interview at our Website.

    Published: 13 years ago


    Microsoft did some smart things last week when it announced its Dynamics CRM Online service.  Most of the headlines will focus on the teaser rate or introductory pricing of only $34 per seat-month for 12 months.  Until June, users of Oracle CRM On-Demand and Salesforce who switch will have an added inducement of up to $200 per user, which everyone acknowledges ought to go to conversion costs.

    There are other reasons to be charmed by Dynamics CRM Online which we can review below but the emphasis on takeaways leads me to ask the question — is the CRM market becoming saturated?  In a saturated market that’s typically what vendors do — keep the installed base happy and try to poach from the other guy.

    But CRM doesn’t look saturated to me.  Just last week I was speaking with a company that had built its own solution and was looking for help selecting something more standard.  It is surprising how many companies like that are still out there. With big analyst firms predicting double-digit growth and many billions in sales for CRM over the next several years, I think I am in good company when I say saturation is not on my radar.

    But that’s not to say that some amount of switching inducement is not in order.  For instance, Greg Gianforte, CEO of RightNow, told me recently that in his area of focus, the service center, there’s good switching activity in part because many of the service center vendors and their products from the client-server era are reaching end of life.  Some vendors haven’t kept up, some are out of business or taken over, and you can’t do some of the things customers want and need like social, if the vendors haven’t kept up with cloud solutions, for instance.  That’s not Microsoft’s issue.

    Also, Microsoft representatives have told a similar tale about aging back office systems and a shift now happening to retire older systems.  So, perhaps for the first time in this cloud- and browser-based era there are significant reasons for companies to consider swapping out their front and back office systems.

    But that’s all back office and service systems.  What about sales and marketing?  Pure SFA has never been a box office favorite with the masses.  Early systems didn’t provide enough value to the end user and eventually, even managers determined that the amount of information coming from first generation SFA was lacking.  But SFA has been increasingly saved by the efforts of people in the marketing automation business.

    Marketers were arguably the first in the front office to see the promise of social media and to take advantage of it.  The result has been a steady stream of better leads from techniques like lead nurturing and various customer analysis schemes which are supported by vendors like Eloqua, Marketo, SAS and others.  Sales seems to be more open to accessorizing than other parts of the CRM suite or perhaps that perception is simply an outgrowth of Salesforce.com’s openness and their AppExchange.  Whatever the cause, companies like Cloud9 Analytics have been able to take the raw data out of Salesforce and provide managers with the analysis and real information that SFA systems alone fail to support.  The result has been continuous improvement in selling and marketing.

    Back to Microsoft Dynamics CRM Online.  I suppose they could have found a longer name but this will have to do.  I’ll just call it “Online”.  Online is a direct challenge to Salesforce and Oracle and employs the same code set, Microsoft CRM Jefe, Brad Wilson, tells me, as the on-premise CRM solution.  In fact, about the only thing different is the branding, which I can appreciate.  On-line means a SaaS or on-demand product hosted by Microsoft.  Partners can host too but they add custom applications and other value add to Microsoft Dynamics CRM.

    Partners also adhere to a more standardized form of SLA than they did a couple of years ago but anyone considering a SaaS solution from any vendor ought to read all of the small print.  Having an uptime commitment is essential, but it’s not the only thing.  For instance, knowing whether the data center is mirrored is important because it impacts how long you’d be down in a worst-case situation.  Good back-up is nice but not if you need 48 hours to spin all of the tapes to get back to work.  Good news here, Microsoft continues to invest in its datacenters to provide the peace of mind factor for its online products.

    Microsoft also launched a Babel of languages — 40 in 41 markets — for Online.  That should cover about 110 percent of the world’s business centers, plus Mars if we ever get there.  The user interface has many graphical features and dashboards and is highly configurable by the user.  It is also well positioned in Microsoft Office integrating with applications like Outlook to take advantage of user familiarity with email.

    There is also the concept of a ribbon at the top of the screen that holds a graphical function menu.  The ribbon changes with every change of location within CRM.  It’s a great way to eliminate irrelevant tabs and bring forward the functions most needed for the work at hand.  I like it.

    I have not been through the product from stem to stern so there are loads of things I am not going to comment on.  But it was difficult to get some information that should have been available.  For instance, I run a Mac and I have many browsers but the analyst briefing was conducted using Live Meeting and Internet Explorer so I was locked out.  I know Microsoft is sensitive about its standards and wants the world to use its products but this is the Internet and refusing to play nice with the other guys is no way to promulgate a standard.  In fact I find this a bit churlish.

    There’s no doubt that Microsoft is “all in” as they like to say.  Steve Ballmer gave the keynote for the kick off and other senior executives also spoke.  All-in-all this is a good effort but from the videos I’ve watched, my impression is that there isn’t enough integration of social media in the business processes demonstrated so, to me, the effort appears to be more 1.x than 2.0.  But perhaps I simply missed something because of browser incompatibility.

     

    Published: 13 years ago