I’ve just returned from my last business trip of the year. This time I was in Washington, DC, hosting the Software-as-a-Service (SaaS), cloud computing and managed services track of NetworkWorld’s IT Roadmap event.

The keynote speaker at the event was Bechtel Corporation’s CIO, Geir Ramleth, who gave a fascinating talk about how his IT team is transforming the way Bechtel leverages technology and business applications by modeling their operations on YouTube, Google, Amazon.com and Salesforce.com, rather than traditional enterprise organizations.

Ramleth has recognized that these on-demand service providers are delivering high-value solutions in an amazingly low cost fashion, making them the envy of CIOs at many of the greatest companies in the world.

Although Ramleth’s team has decided that today’s commercially available SaaS and cloud computing solutions don’t meet their corporate requirements, they still felt the operating model of today’s on-demand service providers … Read More »

Today’s deepening economic crisis is testing the mettle of IT/business decision-makers, IT solution providers and technology investors alike.

IT and business decision-makers in nearly every industry must make cuts to their capital and operating budgets in order to offset rapid declines in business and tightening credit markets. In many cases, this is forcing them to fundamentally reevaluate the way that they acquire and utilize technology and business applications, and leading them to seriously consider various on-demand service alternatives such as Software-as-a-Service (SaaS), cloud computing, and managed services.

I have recently suggested in commentaries in Datamation and the Business Technology Roundtable that any IT/business decision-maker who isn’t seriously considering these on-demand alternatives is doing their organization a disservice and could be jeopardizing their jobs.

THINKstrategies’ latest customer survey in conjunction with Cutter Consortium clearly shows that organizations of all sizes are adopting SaaS solutions … 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 »

I’ve just returned from my fourth trip to Las Vegas in four months where I spent three days attending my second annual Symantec Vision user conference and worldwide industry analyst briefing. The event offered a number of important insights regarding the state of the Software-as-a-Service (SaaS), as well as the managed services market.

I’ve stated in this blog numerous times, we are entering a pivotal new stage in the evolution of the SaaS market in which IT professionals are starting to view on-demand services as a powerful means of addressing many of their age-old management challenges, rather than a threat to their operations.

The Symantec executives who spoke at the conference and shared their candid views with me during the event confirmed my perspective by reporting that they are seeing rising receptivity toward SaaS ‘out-tasking’ alternatives to traditional management products among the … Read More »

One of the benefits of being in the middle of the Software-as-a-Service (SaaS) market is getting exposed to a variety of interesting resources and research projects.

For instance, at last week’s Software 2008 conference in Las Vegas I was able to attend the kickoff presentation by Abhijit Dubey of McKinsey & Company which summarized the firm’s latest SaaS research regarding the evolution of on-demand platforms. Dubey and McKinsey have produced a series of research reports which have verified THINKstrategies’ SaaS survey studies regarding the accelerated adoption of SaaS. Even more importantly, their research clearly shows the total cost of ownership (TCO) and return on investment (ROI) advantages of SaaS for enterprise customers and on-demand platforms for software vendors.

THINKstrategies’ SaaS Showplace has also attracted plenty of attention as a resource for a variety of other research initiatives. For instance, THINKstrategies is … Read More »

As I’ve suggested multiple times, the major hardware and software vendors are aggressively pursuing the tremendous business opportunities in the managed services market.

Now, the key questions are how will they bring these offerings to market and what role will their channel partners play in provisioning these new services?

The two most recent examples are IBM’s new Express Advantage security-as-a-service offerings and Dell’s April 24 closing of its MessageOne acquisition.

IBM’s security-as-a-service solutions are its first on-demand offerings based on its acquisition of Internet Security Systems in August 2006. The new solutions will primarily serve small and midsize businesses (SMBs). They include Express Penetration Testing Services; Express PCI Assessments; Express Multi-Function Security Bundle, which includes protection against worms, spyware, anti-virus and spam in a unified threat management offering; and Express Managed Protection Services for Servers.

These solutions have been historically been offered as on-premises … 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 »

Microsoft’s proposed acquisition of Yahoo has gained plenty of attention because of its blockbuster pricetag and obvious attempt to blunt Google’s success in the online search advertising business.

However, I think the acquisition also has significant implications for the future of on-demand services. Yahoo’s popular portal will certainly be a great new channel to market for Microsoft’s on-demand games and Zune entertainment initiatives.

I’ve also been saying for the past two years that Yahoo and other major online outlets will become the new channels to market for Software-as-a-Service (SaaS) solutions and managed services. This is because many corporate customers are gaining confidence in SaaS and managed services as a viable alternative to traditional on-premise products result of their overall comfort with consumer-oriented on-demand services like Amazon, eBay, YouTube and iTunes. This consumer to corporate buyer crossover makes Yahoo an appealling outlet for … Read More »

I recently had the privilege of conducting a podcast with Nick Lippis of the Lippis Report regarding the evolution of the managed services market. Specifically, we discussed how the market is entering a new era, which I refer to as Managed Services 3.0.

Why 3.0?

Having been a part of the managed services market for the past 25 years, I divide its history into three stages.

In the 1980s, the newly emancipated Regional Bell Operating Companies (RBOCs) formed as a result of the AT&T divestiture were the primary providers of managed services. While they called their offerings managed services, they were really outsourcing arrangements aimed at their largest corporate customers. These highly customized services were part of a larger portfolio of carrier services.

In the 1990s, a new breed of independent service providers emerged offering a new generation of specialized managed services to small- … Read More »

Anyone who follows this blog or the broader on-demand services market is well-aware of the disruptive impact Software-as-a-Service (SaaS) is having on the software industry. Now, software and systems vendors are offering SaaS solutions that could have an equally profound affect on the way organizations acquire and manage technology, as well as transform the way vendors and channel companies sell and support technology.

While the managed services has grown steadily, many channel companies have experienced limited success migrating to a managed services model. As I’ve stated in previous blog entries and my other writings, part of the problem is that executives within established channel companies don’t fully understand what it takes to transform their businesses. But, another barrier to success has been the lack of cost-effective tools.

Until recently, many channel companies were unable to successfully transition to a managed services model … Read More »