Microsoft is finally recognizing the fundamental ways in which people’s lives and work-styles are changing, and it as a company and its technologies must respond to these changes.

Welcome to the world of Software-as-a-Service (SaaS)!

Live Mesh is Microsoft’s attempt to catch up to the Web 2.0 movement which has quickly evolved into an Enterprise 2.0 migration process in which a rapidly growing number of companies of all sizes are shifting their IT strategies from on-premise products to on-demand services.

This trend is being led by Salesforce.com and Google, and being supported by hundreds of other start-ups and established vendors, including Cisco Systems, Dell and EMC.

Salesforce.com and Google’s alliance which produced a new set of integrated services last week is the most recent challenge to Microsoft’s dominance in the workplace.

Cisco Systems has been talking about the melding together of network-centric business processes for … Read More »

In my last blog entry I listed a number of reasons “Why IT Now Sees SaaS As A Savior.” Dan Druker of Intacct, has done a superb job embellishing and expanding upon my ideas on his own blog.

Here’s another important reason why IT is embracing SaaS which I forgot to include in my last blog entry, but may supercede the other reasons I outlined long-term — SaaS enables IT to fulfill its role as an internal service provider.The idea of the IT department serving as an internal service provider to corporate end-users and strategic business units, as well as customers and partners, was first suggested during the late 1990s when an explosion of external service providers (xSPs) emerged in response to deregulation of the telecommunications industry.

While the idea had plenty of theoretical justification and support, most IT departments were unable … Read More »

I predicted in December that IT would become more comfortable with Software-as-a-Service (SaaS) in 2008, helping to accelerate its growth over the coming months.

Here are some clear indications that my prediction is coming true,

SaaScon: CIOs from many big name companies, as well as smaller organizations, spoke about their positive experiences with SaaS and traded insights about how to take fuller advantage of SaaS to meet their end-user and IT management needs.
SaaS for IT: A growing number of major hardware and software vendors are offering SaaS solutions specifically aimed at the IT department. Although many of these offerings could be sold direct by the vendors as managed service solutions, they are being pushed through the vendors’ channel programs.
Platforms: While the initial platform plays in the SaaS market were aimed at software vendors and developers, the more recent initiatives by Salesforce.com, Bungee … Read More »

For years, I’ve been advocating that hardware and software vendors along with their channel partners and telecommunications carriers have the opportunity to leverage Software-as-a-Service (SaaS) solutions and managed services models to generate powerful benchmark statistics and produce valuable best practice studies that can enhance their customer relationships and strengthen their position in the market.

Today, TriActive and THINKstrategies published the first of a series of benchmark studies which clearly demonstrates this unique capability.

The study examines end-user software utilization patterns across over 125,000 endpoints in 460 companies managed by TriActive’s Asset Management Suite™. The study found many companies where Microsoft Office installations are underutilized or not used at all. This means that many companies have more software licenses than necessary or have purchased higher than necessary versions of the software to meet their needs.

Based on this actual software utilization data, the study … Read More »

This week’s third annual SaaScon was more than just another conference. It represented an historic breakthrough for the rapidly evolving SaaS industry.

What made the conference so signficant was the nature of the audience, and stature of the keynote speakers and many of the breakout session presenters. While the originators of SaaScon–including myself as an original member of the conference advisory board–always envisioned the event as an important user-oriented conference, we were unable to achieve this objective during the first two SaaScons. We couldn’t find SaaS users willing to talk about their experiences and couldn’t convince IT/business decision-makers to attend the show. As a consequence, SaaScon just became another place for software vendors, VCs and others to talk about the state of SaaS. This year’s conference was a whole different story.

ComputerWorld’s events team deserves a lot of the credit for overcoming … Read More »

As the Software-as-a-Service (SaaS) movement gains momentum, it is experiencing a ‘gold-rush’ affect with software, systems and service companies of all shapes and sizes trying to win a share of this rapidly growing market.

The inevitable outcome of this proliferation of aspiring SaaS players is a bastardization of the SaaS term and escalating debate about what actually constitutes a valid SaaS company or offering.

Most analysts and commentators insist on a strict definition of SaaS that hinges on the vendor having a multi-tenant architecture. In their view, if the vendor’s offering isn’t built on this architecture, then it isn’t SaaS.

I’ve always been more lenient when it comes to this architectural issue. I believe the definition of SaaS is in the eye of the beholder, and the most important arbiter of what is SaaS is the customer. If the customer is happy … Read More »

With the Software-as-a-Service (SaaS) event season in full throttle, I’ve found myself consulting with a new generation of aspiring SaaS players who are trying to learn about the fundamentals of this rapidly evolving marketplace quickly so they can respond to changing customer requirements and capitalize on new market opportunities.

Starting with SoftLetter’s SaaS Sales and Marketing Seminar in Atlanta which has been upgraded to the SaaS University for Waltham, MA in June, and continuing with OpSource’s SaaS Summit last month in San Francisco, a widening array of incumbent software vendors (ISVs) and old-line technology vendors have approached me seeking help in their efforts to join the SaaS movement.

Some of these companies have lived well for years in niche markets, others have enjoyed cashcow businesses at a mass market level with hardware-based solutions. Now they see a combination of market forces fundamentally … Read More »

Last week’s OpSource SaaS Summit was a milestone event for the on-demand services market on a number of levels.

The first SaaS Summit in Silverado in 2006 was a gathering of industry pioneers to discuss the potential of the on-demand movement. Last year’s Summit in Monterey was an opportunity to celebrate the growing success of the SaaS movement. This year’s Summit offered a chance to take stock of what it will take to scale SaaS to meet the needs of the mainstream market. The theme was platforms and web services, but the event also raised other issues.

With over 600 registered attendees, this year’s SaaS Summit was the largest vendor-oriented conference focused entirely on the rapidly growing Software-as-a-Service (SaaS) market to date. While Salesforce.com’s Dreamforce user conference is still the biggest SaaS event of all, OpSource’s SaaS Summit has represented the benchmark … Read More »

As the Software-as-a-Service (SaaS) market matures, it is becoming obvious to everyone involved in this market that selling SaaS solutions can be a complicated.

First, not every SaaS solution can be sold in a simple point-and-click fashion. Many enterprise applications need to be specifically configured to meet the needs of specific customers. A point-and-click procurement system may still be useful in these situations, but an additional configurator or on-line sales support capability may be necessary.

(Many SaaS vendors are discovering that building a cost-effective billing and procurement engine is also more complicated than they expected.)

Second, selling to many mid- and large-scale enterprises still requires face-to-face interaction. This is why Salesforce.com is aggressively recruiting experienced enterprise software salespeople, many of whom I had the privilege of presenting to in Las Vegas two weeks ago at their 2008 kickoff meeting.

Yet, selling a subscription service … Read More »

Since Michael Dell returned to the helm of his company, he has been dramatically reshaping its channel and services strategies. He is also putting the IT industry on notice that the way hardware companies define and deliver services is changing.

The old guard of the IT industry recognized in the 1980s and 1990s that tech support, professional services and outsourcing could generate lucrative revenues and create greater lock-in opportunities in an increasingly commoditized hardware business. Lou Gerstner saved IBM by turning it into a services company.

Dell bucked this trend by investing in sophisticated supply-chain, fulfillment and customer service processes which enabled it to succeed as a low-cost, high-margin manufacturer.

HP stole a page from Dell’s book and usurped its price advantage. Without a strong services story to serve as a safety-net, Dell was vulnerable to customer defections. It is now seeking to … Read More »