Sometimes, even a free trial isn’t good enough to convince potential customers to buy a Software-as-a-Service (SaaS) solution.

A case in point is LucidEra’s on-demand business intelligence (BI) solution. Even though the company is undoubtedly the thought-leader in this segment of the SaaS market and has experienced some success selling its solutions, the company has discovered that it takes more than the standard ‘try and buy’ sales approach to get customers to take advantage of its capabilities.

This is because LucidEra is aiming its on-demand BI solution at small- and mid-size businesses (SMBs), as well as those large-scale enterprises, which have not deployed BI products in the past because of their costs and complexities. Therefore, these prospective customers have little experience using a BI solution and need some hand-holding to fully understand how to utilize even a relatively easy solution like LucidEra’s.

To … Read More »

I had the privilege of being a columnist for the Web Hosting Industry Review (WHIR) for nearly three years from its inception in 2004 to mid-2007. (Click here to read these columns.) During that time only a handful of hosting companies saw the potential of the rapidly evolving Software-as-a-Service (SaaS).

The majority of those hosting companies who saw the SaaS market opportunity primarily focused on pushing their managed services and co-location capabilities. OpSource was the first to recognize a broader set of business opportunities and became a thought-leader in the industry offering a wider array of services, augmented by set of third-party technologies.

Other hosting companies may have been generating greater revenues from independent software vendors (ISVs), but didn’t pursue the broader array of business opportunities associated with SaaS. As a result, OpSource won the lion share of industry attention and ‘mindshare’.

Now … Read More »

The financial crisis which came to a head last week may only be the latest chapter of an ongoing saga, but it is certainly going to be another driver that will push the on-demand services movement to a new level of market acceptance and growth.

In December 2007, I predicted that the Software-as-a-Service (SaaS) market would not only survive a deepening recession but would grow because of it.

My prediction was based on the premise that financial uncertainty would compel organizations of all sizes to adopt procurement policies which would favor the more flexible pricing model and more rapid deployment capabilities of SaaS, rather than continue to make significant capital investments in traditional on-premise software and systems with long deployment cycles and limited odds for success.

Ten months later and the economic climate has only gotten worse. Spiralling gas prices have compounded the … Read More »

The proliferation of on-demand services has been driven by the promise that these Software-as-a-Service (SaaS) and ‘cloud computing’ alternatives to traditional on-premise software products will be faster to deploy, easier to use and quicker to produce tangible value.

While this is generally true, it doesn’t mean that these web-based applications are entirely fool-proof or without their challenges. Sometimes there are technical nuances which have to be overcome. Other times there are integration, customization or optimization issues which have to be addressed. And like any application, sometimes on-demand solutions encounter service disruptions which need to be resolved.

Until recently, SaaS support services were taken for granted. Many SaaS vendors bundled support services into the price of their SaaS solutions, and offered ad hoc support to quickly respond to specific questions or problems. Much of this support was delivered via online services or email, … Read More »

The recent debate about the viability and value of cloud computing has generated at least one outstanding analysis from a friend at AT&T, that’s right AT&T!

Joe Weinman is the VP of Strategic Solutions Sales at AT&T Global Business Services. He published a terrific blog entry last week on GigaOM which was also distributed by BusinessWeek entitled, “The 10 Laws on Cloudonomics”.

I met Joe at a utility computing conference in NYC in 2004 where we both listened to a series of CIOs discuss how they were transforming their IT operations to achieve their business objectives.

What was facinating about their presentations was that they were not talking about hardware-based utility computing models that many vendors at the time, such as IBM and HP, were pushing. Instead, the CIOs from a number of major corporations and public agencies talked about how they were … Read More »

It continues to amaze me that there are software industry executives who are still living in denial about the rapidly expanding Software-as-a-Service (SaaS) movement.

The latest example is Lawson Software’s CEO, Harry Debes, who was recently quoted in a ZDnet interview as saying the SaaS market will collapse in the next two years.

This interview generated plenty of response and numerous messages in my inbox yesterday. I particularly liked the blog entry of Daniel Druker, SVP Marketing and Business Development at Intacct.

Debes’ interview follows a series of other recent commentaries suggesting that on-demand SaaS solutions and a widening array of cloud computing services aren’t a viable alternative to traditional, on-premise software applications and computing systems.

The nasayers are all entitled to their opinions, but Debes’ views are particularly disheartening.

He starts by discounting SaaS as just “something I’ve lived through three times in my … Read More »

The recent service outages experienced by Amazon and Google have raised additional concerns about the reliability of these services in particular, and the concept of ‘cloud computing’ and Software-as-a-Service (SaaS) in general.

In my last blog entry, I suggested that the term ‘cloud computing’ may be gaining widespread acceptance but could also be preventing many mainstream business decision-makers from getting their heads around the idea of utilizing web-based services to meet their corporate needs.

The faceless personas of Amazon and Google’s cloud computing services doesn’t help the situation. While traditional telephone support services have left a lot to be desired, they at least give customers a opportunity to seek help from a real person.

Neither Google or Amazon offer this form of customer support for their cloud computing services. Given the modest price for their cloud computing services, it is easy to understand … Read More »

My views in a recent blog post about how cloud computing and Software-as-a-Service (SaaS) relate to one another generated some interesting feedback. So, I’ve decided to delve in the cloud computing topic again to see if it can produce a similar response.

A few years ago, as the Software-as-a-Service (SaaS) market began to pick up steam, a debate emerged about whether the SaaS term was the right label for this new movement. Many industry insiders became concerned that SaaS was too techie a term, and proposed an assortment of alternatives they thought would appeal more to mainstream IT and business decision-makers. Some, like ‘webware’, had their own techiness. Others were too convoluted to gain any acceptance. In the end, SaaS has won general approval because it has a clear enough meaning for most people to understand.

Although a similar debate hasn’t emerged … Read More »

In May, I blogged about “Silicon Valley’s first phone company” which was creating a new market opportunity for Software-as-a-Service (Saas) in the voice communications sector.

Today, BT announced its intention to acquire that “Telco 2.0” platform company, Ribbit, for $105 million in cash. Not bad for a company which just closed a “small” B round of funding, according to the company executives I chatted with this afternoon.

This acquisition clearly demonstrates how far SaaS has come.

SaaS is no longer viewed as just a cheaper and easier alternative to traditional, on-premise applications. Instead, SaaS is becoming recognized as a way to fundamentally transform businesses processes and various industries, such as telecommunications.

My roots are in the telecom industry. I helped to launch IDC’s communications industry research program in 1983 at the time of the original AT&T divestiture. I also enjoyed my most satisfying and … Read More »

Last week Appirio announced that it had secured Series B financing of $5.6 million led by Sequoia Capital, the investment firm which has become notorious for also backing Google, Yahoo!, LinkedIn, and PayPal. Sequoia also funded one of my previous employers, International Network Services (INS), one of the high-flyers of the 1990s.

Appirio’s latest round of funding comes on the heals of a Series A investment of $1.1 million which it captured earlier this year from salesforce.com and angel investors. Although there is lots of VC money chasing Software-as-a-Service (SaaS) and cloud computing opportunities, it is rare to have a start-up collect two rounds of funding in the same year.

What makes this latest round of funding for Appirio of interest to me is the implications which it has for the overall on-demand services market.

As I mentioned, I was a part of … Read More »