I had the privilege this week of participating in an interesting webinar sponsored by Makana Solutions regarding the sales implications of Software-as-a-Service (SaaS) and other subscription services.

Tom Wilson, of the Wilson Group; Makana’s founder, chairman, and CEO Liz Cobb; and I discussed how the sales skills and processes differ in the on-demand services world from the traditional packaged product environment. Specifically, on-demand services come at a lower price-point which necessitates higher volume sales to be successful. This requires a transaction oriented sales process and telesales skills, rather than the long salescycles and highly personalized approach of traditional legacy software sales. Therefore, restructuring the sales process and retraining or restaffing the sales team is critical to transitioning to the SaaS and subscription service model.

Similarly, the support function also changes in the on-demand world. Rather than rely on technical support to react … Read More »

Last Friday’s government report indicating a dip in employment levels sent a scare through Wall Street and raised the spector of recession on the campaign trail in New Hampshire.

The irony is that more than half of 112 IT executives recently surveyed by the Society of Information Managers cited the ability to attract and retain IT personnel as their No. 1 concern for 2008. As I indicated in my previous blog, these concerns are among the ten reasons why I think on-demand services will soar in 2008.

Nonetheless, I’ve also received a growing number of resumes from IT/telecom professionals seeking positions in the on-demand market. Some want to get into this rapidly growing market. Others are looking for new jobs because their previous companies failed or have been restructured to better position themselves to capitalize on the on-demand services movement.

In response to … Read More »

In his latest entry on ComputerWorld’s SaaS Revolution blog, Eric Norlin shows how the evolution of SaaScon reflects the maturation process of the broader SaaS marketplace. I think his commentary is right on.

When we launched the conference a year and a half ago, SaaS was still an embryonic market opportunity. Although Salesforce.com had proven its viability as a business, and there was a proliferation of start-ups and established players entering the market, it was still unclear how far the SaaS movement would evolve. It was also a movement of greater interest to the market participants than to potential customers. As a result, a large proportion of the attendees at our first SaaScon event were vendor representatives trying to get a handle on the business opportunity.

Our second SaaScon produced a broader assortment of speakers from a wider variety of vendors, but … Read More »

Since the holidays are traditionally a time for people to take stock of the year past and offer their new year forecasts, here are my top ten predictions why the shift from packaged products to Software-as-a-Service (SaaS), utility computing and managed services will accelerate in 2008:

1. Services are Recession Proof: Escalating oil prices, the uncertain political landscape and faltering financial institutions beset with the aftereffects of the sub-prime lending debacle could mean a tough year for the economy. In this tenuous climate, consumer and executive confidence could decline, leading to an economic slowdown. As a result, many companies could hold back on their capital investments to mitigate their risks. The ability to adopt on-demand services on a pay-as-you-go basis will be a perfect sourcing strategy for businesses seeking greater cost-controls and flexibility.

2. … Read More »

Anyone who has been in the networking industry for over ten years will recall when the term ‘new world service providers’ (xSPs) was coined to denote a new breed of carriers who promised to disrupt the telecommunications industry. Some of these xSPs were competitive local exchange carriers (CLECs), others were Internet service providers (ISPs) or hosting companies.

Although they emerged with plenty of fanfare and promised to deliver a broad set of powerful new data services, when the dot.com bubble burst the majority of these companies disappeared as the telecommunications industry fell into a long, dark, ‘nuclear winter’.

The recent surge in demand for web-based services has rekindled the original dreams of those xSPs who survived and is attracting a new generation of service providers hoping to capitalize on this new round of business opportunities.

Over the past six months, a series of … Read More »

Last week’s announcement by Salesforce.com that it had surpassed one million paying customers marks a milestone for the Software-as-a-Service (SaaS) movement, as well as the company.

THINKstrategies‘ latest industry survey in conjunction with Cutter Consortium has found a third of companies are already utilizing some form of SaaS to help them operate their business and meet their corporate objectives. Our survey found 100% satisfaction among these customers with their SaaS solutions.

This level of satisfaction is unprecedented. It is not only motivating current customers to acquire more SaaS solutions to meet their IT/business needs, but it is encouraging them to recommend SaaS to their peers. This is fueling the growth of SaaS in every segment of the software industry and across every segment of the market.

(Contact me if you’d like to be notified when these survey findings are published.)

While Salesforce.com’s milestone is … Read More »

Last week, Dell made its second acquisition of a remote management services company in less than six months. After buying into the remote server management business with its acquisition of SilverBack Technologies in June, Dell expanded its remote management capabilities to encompass the desktop and mobile devices with last week’s acquisition of Everdream.

(A recent THINKstrategies whitepaper sponsored by Everdream gives some indication of how Dell will leverage the Everdream acquisition.)Both transactions are a part of Dell’s larger strategy to expand its product and service portfolio with a variety of automated solutions. The biggest of Dell’s recent acquisitions with this goal in mind was its EqualLogic purchase for $1.4 billion in cash, which will give Dell automated iSCSI storage area network (SAN) solutions optimized for virtualization environments.

While the EqualLogic acquisition dwarfs the SilverBack and Everdream buys, and has garnered far more … Read More »

Last week’s second annual SIIA On-Demand Conference was a bellwether for the state of the Software-as-a-Service (SaaS) industry. Rather than being composed of the usual suspects of SaaS speakers—Salesforce.com, Microsoft, etc.—the event included an interesting mix of prominent players and start-ups who clearly demonstrated that we are well beyond the ‘why SaaS’ stage and deeply into the ‘how’ phase of this important movement.

The event opened with a packed house of over 300 attendees, many with senior executive titles, and a relatively new name to the SaaS market presenting. Donald Proctor, the Senior Vice President of Cisco Systems’ Collaboration Software Group kicked off the event promoting its vision of the next wave of inter-office SaaS solutions based on WebEx’s collaboration platform which Cisco acquired in March 2007.

Although I might suggest that this wave of inter-office SaaS solutions is well underway and … Read More »

Over the past week, three Massachusetts-based companies have announced important developments which can serve as measuring-sticks for the Software-as-a-Service (SaaS) and managed services markets.

On October 31, Iron Mountain announced its intention to acquire Stratify, a leading provider of electronic discovery services for the legal industry and Fortune 500 legal departments. This announcement came on the heels of the Iron Mountain’s recent analyst briefing focused on its growing digital services business. THINKstrategies views these digital services as part of the broader managed services sector.

Iron Mountain has become a major player in the traditional physical records management in part because of its aggressive acquisition efforts. It has also established a solid foothold in the digital services market as a result of previous acquisitions of Connected and LiveVault. The addition of Stratify gives Iron Mountain a stronger eDiscovery capability to respond to escalating … Read More »

Many industry pundits and trade publications question whether Software-as-a-Service (SaaS) can penetrate large-scale enterprises because they believe it will fail to meet corporate procurement standards and satisfy escalating compliance requirements.

These concerns were echoed in a roundtable discussion within the SaaS cluster of the Massachusetts Technology Leadership Council this past Friday. At our monthly meeting, Eric Esperne, who is the President and Principal Consultant of James River Consulting, gave an in-depth assessment of the procedural hurdles SaaS vendors must face to win corporate approval from the procurement offices of major corporations and governmental agencies. Eric was an in-house attorney for MCI WorldCom and Cable & Wireless, as well as several small government agencies, for over 15 years. So, he speaks from experience.

Yet, THINKstrategies’ research and consulting work is finding that enterprises are not only getting more comfortable with SaaS from a … Read More »