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Posts from the ‘2013 Predictions’ Category

451 Research Summit: Enterprises Competing With Digital Infrastructure & Cloud Computing

bellagio1Enterprises are defining their own cloud strategies, their own way, ignoring vendor hype and requiring metrics that reflect security (61%), mean-time-to-recover from outages (57%), number of data center outages (51%).

This and many insights were gained from attending the 451 Research Hosting and Cloud Transformation Summit at the Bellagio Resort & Casino in Las Vegas last week. 451 Research provided a free pass to the event but did not cover travel, hotel or meals.

What’s refreshing about 451 Group’s conferences is that each of their companies including 451 Research, Uptime Institute, and Yankee Group rely on solid methodologies to research their coverage areas and markets. This results in presentations that are packed with insight and are based on a solid foundation of interviews and research.  I had a chance to catch up with SoftLayer’s Lance CrosbySimon West and Andre Fuochi for an update on how the IBM acquisition is going, which is summarized in this post as well.  The slides shown are from Michelle Bailey, Vice President, Datacenter Initiatives and Digital Infrastructure’s excellent presentation given at the conference.

The following are the key take-aways from the summit:

  • Enterprises are defining their own cloud strategies, their own way, ignoring vendor hype and requiring metrics that reflect security (61%), mean-time-to-recover from outages (57%), number of data center outages (51%). When asked which metrics beyond Service Level Agreements (SLAs) service providers should report, respondents to the 451 Research survey provided the following insights, shown below:

  • The top three SaaS applications in two years will be for the enterprise, business support, and database platforms per 451 Research’s latest survey:

  • Infrastructure-as-a-Service (IaaS) growth is critical to off-premises hosting deployments succeeding in the next two years, as the following graphic illustrates:

  • 80%of enterprises would experience a severe impact to their operations if there was a cloud outage of just a day which make security and availability must-haves for any hosting and cloud services provider.  The following graphic breaks down the impact of service provider outage by time:
  • Worldwide Infrastructure-as-a-Service (IaaS) is projected to grow from $4.475B in 2013 to $10.23B in 2016, with Platform-as-a-Service (PaaS) growing from $2.23B in 2013 to $5.24B in 2016.  The following slide provides a breakout of forecast categories by hosting and cloud business categories:

Why Enterprises Need A Digital Infrastructure Playbook

The focal point of the summit was the launch of the digital infrastructure playbook.  Tony Bishop, Chief Strategy Officer, The 451 Group introduced the Digital Enterprise Playbook Series which you can download here. His presentation provided insights into how enterprises are struggling to align legacy IT, infrastructure including data centers, cloud, applications and system management to business goals while becoming more agile.

I had a chance to speak with Tony after his presentation and asked him why enterprises need a digital infrastructure playbook now.   “Digital transformation is breaking down the barriers to sustainable global prosperity by shifting power towards the individual,” he said. “This revolution will transform how enterprises create and deliver value. Digital enterprises will pursue and build dynamic infrastructure capabilities to innovate and differentiate customer experience, constantly empower employees and disseminate prescriptive knowledge across the enterprise.”

One of the most passionate and knowledgeable people I’ve ever met in infrastructure and IT research is Martin McCarthy, Chairman and CEO, The 451 Group.  He told me he’s seeing more pressure than ever for edge-to-core integration in the enterprise, which is forcing CIOs to be strategists over experts in cost reduction.  “Digital infrastructure will be the backbone enabling enterprise transformation in coming years. To blaze this trail, organizations need an ‘edge to core’ digital infrastructure playbook,” he said.   Presented below is a page from the Digital Enterprise Playbook Series:

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IBM SoftLayer Update

  • IBM’s acquisition of SoftLayer is going excellently and many IBM divisions now are actively collaborating with the Softlayer team to migrate existing apps and develop new ones. Thank you Lance CrosbySimon West and Andre Fuochi for the update provided at the conference, it was invaluable.
  • Softlayer will be the foundation for a global cloud services infrastructure capable of delivering applications across multiple continents and thousands of users within hours, not days.  Lance Crosby explained the vision IBM has of delivering a continual stream of new applications and services over the global cloud services infrastructure network, which has the potential to turn into a high margin business quickly.
  • Softlayer is assisting with making the IBM Request for Proposal (RFP) more efficient based on their deep expertise in this critical area. Based on personal experience it can take anywhere from several weeks to up to several months for an RFP response.  SoftLayer has devised processes and systems that make RFP response times a fraction of that.
  • The majority of the top ten customers Softlayer has today are running large-scale clusters of Hadoop, with 40 Hadoop clusters being commonplace.  Lance Crosby mentioned these customers are very sophisticated in their use of Hadoop and many of them are in consumer products companies, looking to gain greater insights into customer behavior.
  • Bare metal servers running Hadoop are one of the fastest growing areas of the Softlayer business right now.  Simon West made an excellent point that running Hadoop on bare metal servers instead of through virtualized environment leads to a higher level of throughput, given Softlayer’s internal testing results.  Bare metal servers continue to accelerate in the industry and Softlayer’s executives confirmed they are seeing an acceleration of demand in this area.
  • An additional six data centers are planned for 2014, and SoftLayer has the capability to build one data center every two months of needed.  When asked what the global expansion plans are for SoftLayer since the acquisition, Lance Crosby told me London and Germany are of primary interest.  He also added that whenever the demand for a given nation reached between four and five thousand servers, Softlayer and IBM will consider building a data center in-country.

Roundup Of Small & Medium Business Cloud Computing Forecasts And Market Estimates, 2013

Small & Medium Business cloud computing What sets apart the fastest-growing small businesses is their an innate strength at turning data and information into results.

It’s becoming easy to spot a smaller business who is going to break out and grow quickly.  They often have these qualities:  they highly value knowledge, expertise and speed over seniority or cronyism; they have successfully managed a geographically distributed supply chain, production and service operations early in their history; and long before they reach $20M in sales they have learned how to balance domestic and international customer demands.  In short, they learned fast how to compete and win business globally.

Over the last several months research firms and enterprise software vendors have released studies on cloud computing adoption in small & medium businesses (SMBs).

The following are the key take-aways from these studies:

  • Forrester forecasts that channel partners will increase their reliance on cloud software and services from 22% to 27% from 2013 to 2014.  The majority of this growth will be in SMBs. For additional details please see the free reprint of the report, Cloud Channel Trends, 2013 To 2014 by Tim Harmon and Jonathan Silber, February 28, 2013.  You can download the reprint here (no opt in required): http://www.forrester.com/pimages/rws/reprints/document/90001/oid/1-LMIK8X
  • 61% of SMBs who responded to a recent survey are using cloud-based solutions today, with an additional 5% planning to add cloud services in the next six months.  69% of SMBs with fewer than 20 employees and 55% of SMBs with 250 to 999 employees are using cloud-based applications today. North American SMBs are more likely to use cloud-based applications co these services than EMEA (64% compared to 56%). Source: State of SMB IT 1H 2013 Semi-Annual Report On Small And Midsize Business Technology Plans & Purchase Intent (Opt-in required): http://www.spiceworks.com/marketing/state-of-smb-it/ The following is a graphic from the report:

figure 1 smb cloud adoption

  • SMB spending on cloud solutions will grow by almost 20% over the next five years, with 3 in 10 midsize firms adopting public cloud solutions.  IBM is offering a free download of the IDC report, Cloud Computing in the Midmarket: Assessing the Options in 2013 (no opt-in required): http://idcdocserv.com/995  IDC’s graphical definition of how their Primary Market and Secondary Market IT Product Taxonomy maps to the NIST Taxonomy is shown below:

figure 2 smb cloud adoption

  • Cisco predicts the U.S. SMB commercial-services market addressable by service providers will grow to more than $200B by 2015. Also included is an analysis of how fundamental differences in business segments drive IT behavior, as the following table illustrates. Source: What Do SMBs Want from Commercial-Services Providers? Insights from Cisco’s U.S. Research on SMB Services Delivery  Link:http://www.cisco.com/web/about/ac79/docs/sp/SMB-Cloud-Survey.pdf. Please click on the image to expand it for easier reading.

figure 3 smb cloud adoption

  • Hosting and cloud services provider Parallels projects that the worldwide SMB SaaS applications market was $14.5B in 2012 today and will grow to $33.8B by 2015, attaining a 32% Compound Annual Growth Rate (CAGR).  Please see the following illustration of a breakdown by region over the forecast period.  Source: Profit from the Cloud 2013 Global Parallels Global SMB Cloud Insights  Opt-in required, Link:  http://www.parallels.com/fileadmin/parallels/documents/smb-reports/2013/2013_SMB_Brochure_Global_web.pdf.  Please click on the image to expand it for easier reading.

figure 4 smb cloud adoption

  • The latest research note from Bain & Company predicts revenue growth for SaaS companies will triple between 2011 and 2014.  The note also includes a revenue projection by category and is shown below. Source: The cloud reshapes the business of software by Ravi Vijayaraghavan http://www.bain.com/Images/BAIN_BRIEF_The_cloud_reshapes_the_business_of_software.pdf.  Please click on the image to expand it for easier reading.

figure 5 smb cloud adoption

  • SMEs overwhelmingly prefer to buy or acquire  these critical systems (43%) rather than lease or pay for use (23%) in an SAP-sponsored survey by Oxford Economics.  The study found that the tools most commonly used by SMEs are business management software (48%), mobile (46%), and analytics (44%). Cloud computing adoption is expected to jump from 35% to 47% in three years. An infographic summarizing the results is below. You can get the survey results here: http://cdn.news-sap.com/wp-content/blogs.dir/1/files/SAP-SME-analysis-presentation.pdf . Please click on the image to expand it for easier reading.

figure 1a smb cloud adoption

Best- And Worst-Performing Cloud Computing Stocks In The First Half Of 2013

Cloud computing stocks continue to show wide variation in performance throughout the first half of this year.

Ten of the twenty companies in the Cloud Computing Stock Index delivered returns to shareholders with NetSuite leading with a 37.30% share gain, delivering $13,730 on $10,000 invested on January 2, 2013.

To more fully define the stock performance of these companies, I’ve added Earnings Per Share (EPS), Price/Earnings Ratio, Year-To-Date (YTD) Total Gains or Loss, Annualized Gain or Loss, and Total Dollar Value of $10,000 invested on January 2, 2013.  You can download the latest version of the Cloud Computing Stock Index here.  The filter applied to these companies is that 50% or more of their revenues are generated from cloud-based applications, infrastructure and services.  Additional details of the index are provided at the end of this post.

 

Best Performing

Name

Symbol

(1/2/13 – 7/5/13)Total Gain or Loss

Annualized Gain or Loss

Total Dollar Value of $10K invested in this stock on Jan. 2, 2013 as of July 5th:

NetSuite Inc

N

37.30%

87.55%

$13,730.00

Keynote Systems, Inc.

KEYN

36.18%

84.53%

$13,618.00

CA, Inc.

CA

26.67%

59.83%

$12,667.00

Workday Inc

WDAY

23.81%

52.77%

$12,381.00

Cisco Systems, Inc.

CSCO

22.60%

49.82%

$12,260.00

Symantec Corporation

SYMC

18.84%

40.84%

$11,884.00

Amazon.com, Inc.

AMZN

11.10%

23.23%

$11,110.00

 

Worst Performing

Name

Symbol

(1/2/13 – 7/5/13)Total Gain or Loss

Annualized Gain or Loss

Total Dollar Value of $10K invested in this stock on Jan. 2, 2013 as of July 5th:

Rackspace Hosting, Inc.

RAX

-46.78%

-71.39%

$5,322.00

Fusion-IO, Inc.

FIO

-41.21%

-65.13%

$5,879.00

F5 Networks, Inc.

FFIV

-31.57%

-52.88%

$6,843.00

VMware, Inc.

VMW

-29.94%

-50.63%

$7,006.00

Riverbed Technology…

RVBD

-24.91%

-43.34%

$7,509.00

Red Hat, Inc.

RHT

-11.47%

-21.46%

$8,853.00

Key Take-Aways:

  • NetSuite leads the index with a 37.3% gain in their stock price, and $10K invested in their stock on January 2nd of this year would be worth $13,730 as of July 5th.  Cloud-based Enterprise Resource Planning (ERP) systems acceptance is accelerating, evidenced by the success NetSuite is having with their two-tier ERP strategy and recent announcement they are moving into manufacturing.  Their recent alliance with Oracle also shows upside potential.   A cloud-based ERP provider leading the index is good news for Acumatica and Plex Systems especially, the leader in cloud-based ERP systems for manufacturing and one of the most enthusiastic customer bases in enterprise software.  Both of these companies are privately held or they would have been included in the index.
  • The 20 companies that comprise the Cloud Computing Stock Index attained a 29.6% return from July 10, 2012 to July 5, 2013.  The Dow Jones Industrial Average (DJIA) gained 18.83%;  Microsoft, 14.02%; Oracle, 7.17%; and SAP, 27.51%.  The following chart compares the performance of each. Please click on the index to expand it for easier viewing.

  • Widespread adoption of Amazon Web Services, success using the Kindle series of tablets as customer acquisition tools for digital content, market leadership of the online retail landscape, and successful pilots of the AmazonFresh online grocery business in Los Angeles and Seattle are all fueling Amazon’s stock performance this year.

Specifics on the Cloud Computing Stock Index

I used The Cloud Times 100 as the basis of the index, and included the 20 following companies, all of which are publically traded.  The latest edition of the Cloud Computing Stock Index is shown here.  Please click on the index to expand it for easier viewing.

 Note: I do not hold equity positions or work for any of the companies mentioned in this blog post or included in the Cloud Computing Stock Index.  

CIOs On Cloud Computing Adoption: Conquer Complexity And Help Us Grow

CIONTT Europe recently completed a study that found 56% of CIOs and Senior IT leaders see complexity of their own Information and Communications Technology (ICT) systems as the biggest barrier to their organization’s enterprise-wide adoption of the cloud.  The survey contends that cloud adoption continues to be tactical in nature as a result of the inordinate complexity of existing and legacy ICT platforms.

Completed in April and May of this year in the United Kingdom, the study Growing Pains In The Cloud, 300 CIOs Express Their Views About Barriers To Cloud Adoption (opt in required) was completed by Vanson Bourne and included 300 interviews of CIOs and Senior IT leaders from public and private organizations with 250+ employees.

While the study was completed in the UK, the findings are applicable to enterprises globally looking to use cloud computing to better align business and IT strategies.  59% of CIOs and IT Leaders surveyed say that enabling alignment of business and IT strategies using cloud infrastructure is their number one priority.

Key take-aways from the study include:

  • 53% said that launching new services and applications more quickly is a key request they receive from business units. In the transport and logistics sector four fifths (80%) of CIOs confirmed launching new services and applications is their most important business focus.
  • 60% of IT leaders are concerned that cloud providers don’t  appreciate how complex legacy ICT systems are, and fear migration to the cloud could fail.  A common concern of respondents is how vendors tend to oversimplify their cloud solutions despite the inordinate complexity of ICT legacy platforms and systems.
  • 46% of the IT leaders polled agree that cloud is a great enabler of ‘bring your own device’ and flexible working, through enabling remote access to data and applications.  The challenge is making cloud infrastructure work seamlessly with legacy platforms and applications.
  • 68% have had cloud-based systems in place for two years or less.  The following graphic shows the distribution of cloud adoption by industry included in the study.
  • 77% of CIOs and Senior IT leaders report cloud-based infrastructure is in use today in their enterprises.  87% of CIOs in media and retail, and 84% of CIOs from telecommunications and ICT companies have already implemented a cloud-based infrastructure as well.  The following graphic illustrates the use of cloud as part of respondent’s ICT infrastructures.
  • 28% of the CIOs surveyed stated their legacy systems were too expensive (or valuable) to abandon altogether.  The implication is that CIOs and Senior IT leaders expect cloud platforms to eventually handle the complexity of their core business systems while also meeting compliance requirements internal and external to their organizations.
  • The four industries with the highest concentration of legacy ICT systems include Financial Services (30%), Media & Retail (31%), Transport and Logistics (31%) and Public Sector (30%).  CIOs in these industries show the highest resistance to cloud adoption in the study.  6% of CIOs said they have no plans to adopt cloud computing.

Bottom line:  CIOs are looking for cloud solution providers that recognize just how uniquely complex their businesses are and can address legacy system integration challenges head-on.  With 59% saying they have responsibility for aligning business and IT strategies, greater cloud adoption at the enterprise level is inevitable.

North Bridge Venture Partners Future Of Cloud Computing Survey: SaaS Still The Dominant Cloud Platform

6-19-2013-4-19-15-AM-300x223North Bridge Venture Partners and GigaOM Research released the results of their third annual Future Of Cloud Computing Survey today, providing a glimpse into cloud computing adoption trends, inhibitors and drivers of long-term growth.

This year’s survey included 855 respondents selected across business users, IT decision makers and cloud platform and application vendors.  North Bridge and GigaOM Research report that a third of respondents are C-level executives in their organizations.

You can view a copy of the report results here from SlideShare.

The following are key take-aways from the report:

  • Cloud adoption continued to rise in 2013, with 75%  of those surveyed reporting the use of some sort of cloud platform – up from 67% last year. That growth is consistent with forecasts from GigaOM Research, which expects the total worldwide addressable market for cloud computing to reach $158.8B by 2014, an increase of 126.5% from 2011.  The survey also shows significant growth is yet to come in SaaS adoption for business systems and IT management.

.

  • 63% of those surveyed report Software-as-a-Service (SaaS) is in use in their companies, growing 15% over 2012.  45% are using Infrastructure-as-a-Service (IaaS) today, attaining a growth of 29% from last year.  Platform-as-a-Service (PaaS) is expected to grow the fastest over the next five years, with 72% of respondents saying they expect to use PaaS in their organizations.
  • The survey results also included cloud segments and overall growth analysis forecasts from 451 Research Market Monitor Report.  The graphic showing CAGRs by IaaS, PaaS and SaaS is shown below, with comparisons of 2012 results and 2016 market forecasts.

  • 52% of organizations are using cloud-based applications to advance business priorities, compared with 36% that use applications that advance IT initiatives.
  • CRM, marketing (including marketing automation) social business & collaboration and file sharing cloud-based applications are in use by more than 50% of all organizations in the sample.
  • North Bridge Venture Partners reports that cloud investments by venture capitalists totaled $1.6B in 2010, increasing to $2.4B in 2011.  Investments in 2012 dropped to $1.8B and through May, 2013, venture-based investments in cloud computing application and services providers totaled $281M.  Subscription fee-based business models dominate with 77% of cloud vendors relying on this strategy.
  • Gaining greater business agility (54.5%), scalability (54.3%) and cost (48%) are the three main drivers of cloud adoption today according to the survey results.  Mobility was mentioned by 25% of respondents as a major driver for adopting cloud applications and platforms, behind cost.
  • Security concerns (46%), vendor lock-in (35%), interoperability (27%), concerns over reliability (22.3%) and complexity (21%) are the top inhibitors to cloud adoption.  Regulatory compliance (30%) and privacy (26%) are he next most frequently mentioned inhibitors to cloud computing adoption according to the survey.
  • 39% expect to increase training, and 17% expect to hire outside resources as a result of increased cloud adoption.
  • Amazon (14.3%), Microsoft (10.96%) and Google (7.88%) are the three most used cloud platforms by the organizations who responded to the survey.

How Cloud Integration Is Defining The Future Of CRM

Scribe SoftwareThe future of customer relationships depends more on context than transactions.   And this trend is accelerating, driven by the integration of social media into customer relationship management (CRM), rapid gains in usability of CRM and integration applications, and the global growth of the API economy.

Gaining a clear, contextually-based view of customers isn’t easy. Fine-tuning system integration to understand the nuances of customers, gain greater insights and infusing customer intelligence through a company requires more than APIs and cloud platform integration.  It requires a precise strategy of integration to align customer data to ongoing strategies.

The bottom line is that customer-driven integration is reshaping CRM and will accelerate as cloud platforms, combined with APIs, reorder the customer relationship landscape.

To gain greater insights into what’s going on in the area of cloud-based CRM integration and the impact of the API economy, I recently spoke with Lou Guercia, President and CEO, and Betsy Bilhorn, VP Marketing and Product Management of Scribe Software

Key take-aways from my interview with them include the following:

Cloud integration is one of the fastest growing areas of enterprise software today, made more complex by cloud platform providers creating their own unique approaches to APIs.  What are the top three lessons you’ve learned navigating Scribe through the many potential product and services strategies cloud platforms are providing today?

The top that come to mind are understanding that your cloud platform vendor absolutely affects your product offering and making sure your offering is portable, that you’re not too deep in one vendor’s technology or platform.

There are a many new cloud services and platforms – you have to make a choice between an established, proven vendor or taking a chance as an early adopter of something new. We decided to be an early adopter and we’ve had mixed results, which at times caused problems for our customers. Customers don’t care who caused your slowdown or outage – they expect that you have service available no matter what. As a result, we had to build out sophisticated and sensitive monitors, fail-over and availability capacity.

One of the things we did, and it was fairly controversial at Scribe, was make sure our offering was highly portable. Given the vendor’s brand name, there were people who felt that there was no way something could go wrong and we were showing a vote of no confidence by not completely embracing the service. Others at Scribe were skeptical and insisted we not get too deep into this particular technology so we could pull the plug quickly if it didn’t work out. Even though it was not a popular decision, we made sure this portability was part of our architecture from day one and we’ve resisted getting too dependent on unique capabilities even though it could be easier from a development standpoint.

Keeping that discipline turned out to be a very smart move – we’ve since had to move parts of our offering to other platforms and services that could better accommodate our growth and capacity needs. As we compare notes with other integration companies with cloud offerings, we’re hearing similar stories. We want to focus on our features and services and we want to be able to make sure our platform is stable and performing for our customers. Having the ability to move parts and pieces of our architecture when we need to is critical as we grow. Our planning and roadmap now include a capacity review and all options are on the table, including changing technology platforms or vendors.

Many say enterprise software is quickly moving in the direction of an API economy.  What are your thoughts on the API economy beginning with how you define it, and how will it change CRM in the next three years?

When we look at the enterprise software space and how it is still very challenging to integrate the data across these applications, it absolutely makes sense directionally. There are so many new technology stacks and platforms out there and the old ones aren’t going away either. APIs are a logical framework for people to access, share, and integrate data regardless of where it lives or how it’s stored.

This is really exciting for CRM. There is a lot of talk about the 360 degree view of the customer but the reality for most businesses is that actually getting all that data is still difficult and not standardized. If you’ve got a lightweight API to access any number of customer data points in and outside the business, CRM would be more a framework and platform to select and mash up those data feeds in a tailored presentation for particular roles in your business – sales, support, marketing, etc. You could put a very powerful, functionally relevant view of the customer at your employee’s fingertips. We’re already seeing that today with the ability to embed Google Maps, social feeds, and the like in CRM. But think about how incredible it could be for CRM if you were able to do that type of embed with virtually any data source.

In such a highly competitive, rapidly changing and technically complex market area, how do you continually innovate and generate new ideas?

The best way to describe how we innovate is that we take a clean sheet of paper approach when thinking about product. Our product team typically looks at the business problem first and gets very creative about how to achieve the desired outcome. We also take a hard look at the status quo and challenge “how can we do this completely different and better”? Our goal is to delight our partners and customers with product that they find easy to use and that gets the job done without a lot of hassle or drama. Sometimes it takes an unusual path and it typically isn’t your big, trendy items. For instance, most integration projects require a team of people to accomplish – experts in data, experts in business process, usually an outside consultant or professional services vendor. One of the things we heard in passing was what a pain in the neck it was to manage multiple clients and getting permission from the client’s IT organization to access the integration environment – one of those things you just talk about as an accepted pain of doing business. In response, our product team brought in social features like the ability to invite or de-invite members to a specific customer organization and allowing the owner of that customer organization to set permissions of what that member could do in their organization. In the grand scheme of things, this doesn’t seem like a big deal but today, that social user experience really excites our customers and partners and it’s become a key differentiator for Scribe.

For many enterprise software companies, selling through resellers is challenging.  What key lessons has Scribe learned about making a reseller strategy for cloud integration services successful? 

We’ve been selling through the channel for a long time now – understanding their business model and supporting their success is paramount to us as a business. Partners are all about standardization, efficiency, quality, and repeatability at scale – you need to be oriented to that outcome whether it’s product, programs, pricing, communications, or support. Who you are and what you provide needs to be consistent and fair to the entire community.

Our motto is “own the customer, respect the partner”. When we’re servicing a customer directly, we are very cognizant of the partner and we know that customer’s experience with Scribe can directly impact their relationship with that partner. You have to weigh your interactions with a customer against the whole of your partner relationship and calibrate accordingly. So we make sure that we give our customers the same touch and quality service as our partners. Your reputation with your partners and that partner community will dictate your success in the channel. You have a great reputation with your partners and you’ve got their back – they are going to reward you by being incredibly loyal. The top reason we hear from prospective partners looking to make a switch is “this vendor was really difficult to work with” or “this vendor failed in delivering to my customer and I need something now to get this customer back on track”.

The growth of the API economy has many parallels to growing a reseller-based business.  How do you view these parallels and how do they open up greater avenues of innovation to benefit those companies using CRM today and in the future through resellers?

Where we see a distinct parallel is taking hold of a something like data or an application, and evolving it into a completely new and innovative offering, which completely transforms the experience of using it – for the better. With APIs it’s about evolving connectivity and access. In CRM, the most successful resellers reinvent the CRM application as a platform. They craft entirely new solutions on CRM that are imbued with their particular expertise in a vertical or a set of business processes that make CRM much more straightforward and easier to use. Often these offerings are unrecognizable from the original CRM. This innovation benefits business customers as the reseller is productizing their expertise and making CRM much more turnkey for them. At the end of the day, it isn’t about the particular CRM vendor or platform but more about the particular capabilities that a reseller has in their turnkey CRM offering. That’s a huge benefit to customers as they’re now able to focus on picking the right reseller and their expertise to help their business versus being distracted and consumed with the nuts and bolts of hand-tailoring the CRM application to fit their needs.

What are you seeing in terms of on-premise to cloud migration on the part of resellers?  Are they bringing you more deals that are cloud-based versus on-premise?  Does this vary between North America and EMEA (Europe, the Middle East & Africa)? 

The reseller channel is going through an interesting evolution with cloud. What we’re seeing are resellers typically making two choices, going cloud or sticking with on-premise but focusing on larger, enterprise deals. We’re seeing some of our existing resellers re-aligning their offerings and services around cloud; they may continue to do premise deals but they aren’t leading with premise. We’re increasingly working with a third category of new partners who have entered the CRM business recently as exclusively cloud; typically these resellers represent multiple CRM vendors (Salesforce, Sugar, Dynamics CRM Online, etc.) in their practice.

Regardless of the partner orientation towards cloud, we are definitely seeing a shift towards cloud deals. EMEA is behind North America but is quickly closing the gap – we see growing adoption of cloud applications and there is an excitement and interest in EMEA for more cloud.

Can you walk me through the new product development cycles you use?  How are you seeing the market cadence right now from a cloud integration perspective?  Is it 6 months, or shorter than that for each new release?

The cloud is driving faster release & upgrade cycles overall. Customers use cloud applications in their everyday lives and those consumer applications typically have rapid response to feedback; it’s not unusual to get an update on your iPhone apps once a month. We’re seeing those same expectations in the business applications space – you shouldn’t be waiting 6-12 months or more for updates to the product. The nature of cloud allows us to be much more responsive giving us the flexibility to push out updates when we need to.

Our release cadence is 8 weeks. We might go longer to a 16- or 24-week cycle for a major release. Our connectivity release cycle is much faster. Each quarter we’re typically releasing 2-3 new connectors and 2-3 upgrades to existing connectors. This release cadence has been a real advantage for us in closing deals and building customer loyalty. Every two months we’re putting in enhancements and new features – many of those driven from direct customer feedback. We’ve won more than a few competitive and strategic wins because we were able to incorporate feedback from the prospect during the proof of concept or trial phase of those deals within a short period of time.

Earlier we spoke about how your company is successfully using personas to guide new product development.  Can you comment on how personas guide the development and launch of new products?

Personas provide that guiding star for the development team to build towards. It’s not just the “what” and the “how”, it’s the “who” and the “why”. When we start with personas we’re talking about the business problem or goal that our customer is grappling with. That’s where the innovation we talked about earlier comes in – we try to solve for the real world business problem and an authentic user experience for our target customer. After we have the persona solidified, then we apply a particular technology approach and design. Starting with what success looks like to the customer keeps things very clear and real in terms of design, scope, what the product will and will not do.

The development team has a much clearer understanding who they are building product for and why it needs to be a certain way. If there is a question or difference of opinion about the user experience or the way a certain feature should work, we always go back to the persona. It’s a very efficient sanity check throughout the development process – would our persona really use this feature in this way, would they be comfortable working that way in real life, do they really need this feature or capability to do these extra 5 things we think they do?

Personas are very helpful in discouraging developing products that might be perceived as cutting edge to the tech community but ultimately don’t give the customer what they need and want. We like cool technologies and features, and we’ll put it in there but only if it fits the persona.

Has any customer measured the impact of Scribe integration solutions in the context of improved user experience and customer satisfaction?  If so, can you share those figures? 

An interesting question and one we asked in our recent State of Data Integration 2013 survey. What we found was that over 70% of our survey respondents had no formal process for evaluating the success of their integration and articulating the return on investment either in operational improvements or customer satisfaction. With a partner involved there is some improvement as the partner has to typically prove the success of their engagement but it’s not what we’d like it to be. It’s virtually impossible to get a customer to capture any meaningful metrics after the project has been completed.

What we’re finding is that partners and customers don’t know where to begin to measure the impact of their integration and there are no standard templates or resources to use as part of the project planning & tracking. This is a problem we’re tackling in the coming months, providing standard metrics that any partner or customer can use to track the success of their integrations.

What are the most important metrics to keep in mind when evaluating the performance of a cloud integration platform?  How did these metrics influence the design, coding and launch of Scribe Online?

The most important metrics are usability and performance. The obvious one, performance comes in many flavors but the big ones we look at are the responsiveness of the platform user interface, the throughput and speed of the integrations, and the reliability/availability of the platform overall. These are table stakes. When we say usability, we mean how many customers are actually creating and running integration jobs? How often are they logged into the system and what are they doing? Are they adding new integration jobs? Using new connectors? How many customers are renewing and/or increasing their subscription levels? These are metrics we measure. If a customer were evaluating a platform, questions I’d be asking would be “how long does it take to get a typical integration project live and running?”, “do you require professional services and how much/how long does that engagement typically run?”, and when talking to references “did you get your integration project done in the time frame you expected?”

Usability is very, very important to us. You can have a platform that processes billions of rows a day but if it is difficult to configure, use, and maintain, customers are going to gravitate to vendors that have both performance and better usability.

Have you seen a shift in the types of CRM applications being integrated within the last twelve months, and do you see trending of these systems changing in the next three years?  Why or why not?

In the past twelve months, we’ve seen a shift where customers appear to be doing less of the rip and replace with new CRM systems and more where they are adding on other, customer-facing applications with discrete functions like marketing automation, e-commerce, sales productivity, or support. We’re also seeing an uptick in two-tier CRM integrations where a division or line of business will use one vendor’s CRM for specific range of capabilities but want to integrate with the legacy or corporate CRM.

Certainly the CRM vendors are adding more capabilities and providing more complete platforms that include marketing automation, support, e-commerce, finance, and social. What will be very interesting in the next three years is if businesses will embrace these platforms completely or if they will use parts and pieces of these platforms and integrate them with existing application investments or other CRM platforms. For instance, would a business decide to purchase Salesforce Support Cloud and integrate that with NetSuite? We think given what we’re seeing in with legacy applications – that businesses have made major investments in and are still realizing value from these applications – that a rip and replace to a complete CRM platform from one major vendor might be a bit of stretch. Given that cloud integration is evolving quickly, it would seem that a business could put together best of breed cloud CRM apps just as they did with premise applications in the past.

Often integration in small and medium businesses, which is a market Scribe excels in, are complacent about the need to change and adopt a more unified CRM system.  Is complacency is your biggest competitor?  How do you overcome that in your channel development, marketing and selling strategies?

We’re seeing SMBs are as savvy as our largest enterprise customers about integration. They get the need for an integrated CRM system to keep competitive. SMBs are requiring integration in the first phases of their CRM implementation and are asking partners about it. That’s a big shift from 4-5 years ago where partners had to educate the customer about the benefits of integration and why spending money/time/resources on integration are valuable. It’s less complacency that is our biggest obstacle with SMBs – its education and outreach that there are affordable, easy-to-use integration options out there for the SMB that allow them to realize the same business benefits as the big companies. If you define complacency as the common belief that there is just nothing out there right now for the SMB, then yes, it’s a competitor. We have been aggressive in recruiting partners who specialize in SMB and making sure our cloud integration platform have the features and capabilities so these partners can service a large volume of smaller customers quickly and cost-effectively. We also work with our partners with other marketing outreach to educate the SMB that integration is possible and how to best approach that first integration project. And it goes back to that usability metric – we want the SMB to have an easy time with integration – so that means proving it with our selling, our marketing, and our partner channel. All of it needs to be approachable and reinforce that integration is accessible and can be realized by the SMB.

What are Scribe’s top three goals for 2013, and how are you tracking to them?

Our top three goals in 2013 are to continue build out the features and services in our cloud platform, continue to offer more customer data connectivity, and continue to build out our ecosystem of ISVs and partners using our online platform. We’ve had excellent success in all three areas – we’ve announced partnerships and connectivity to Marketo, Silverpop, and ExactTarget and we continue to build and enhance the platform. The interest in the channel and the ISV community is very strong – we have as much incoming as we do active outreach – and we expect more ISV partnership announcements later this year.

When you and your company look three years into the future, what will cloud integration look like? 

In three years, integration should be ubiquitous in most business applications. It’s not just about APIs – it’s about customers being able to connect quickly, easily, and seamlessly to other applications without having to stitch code together or understand what entities and methods to use. When we use consumer applications today, we don’t care or think about things like how to send a Tweet to my Facebook feed – we just press a button and it happens. I think you’ll see more turnkey integrations based on common business processes that business users can provision and manage within the  user interface of their business application instead of using a separate application. There will always be a market for more sophisticated, unique integration needs but common business practices such as sales order processing should be something a business analyst or system administrator could invoke within a CRM or ERP user interface, perform some light customizations as needed, and provision.

Demystifying Cloud Vendors

cloud-computing landscapeCutting through the hype of cloud vendors starts by evaluating how ready their Cloud Services, enabling technologies and Professional Services are to serve customers today.

That’s one of the key take-aways from a recent webinar I attended titled How Cloud Computing Changes the Vendor Landscape by David Mitchell Smith, VP and Gartner Fellow last week.  The slides are available for download here (Free for download after Gartner registration if you are not a Gartner client).

What made this webinar unique and worth mentioning is the framework that was presented for evaluating vendors.  Beginning with the well-known Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) structure, Gartner added in a Business and Information Systems layer that includes brokerages, management and security.  This is the layer where Gartner says they are seeing enterprise clients most concentrate on emerging technologies.

The cloud vendor landscape is defined by Cloud Services, Professional Services for Consumption, Enabling Technologies and Professional Services for building and running applications.  Green designates a vendor area of emphasis, yellow are those areas serviced by partners and white areas are not addressed by the vendor’s strategy at all.

Using this framework, nine different companies were analyzed including Amazon, Google, HP, IBM, Microsoft, Oracle, Salesforce.com, SAP and VMWare.

  • Microsoft has the most ambitious cloud strategy of the nine companies profiled, and their cloud-first design initiative shows they have faith in Azure performing in the enterprise.  Microsoft Dynamics AX 2012 will first be released on Azure, then on-premise is a case in point. Microsoft is impatient  to move into a subscription model with its evolving cloud platform. Gartner’s analysis of Microsoft’s cloud strategy is shown in the following graphic.

Microsoft Cloud Strategy

  • Oracle is one of the most persistent cloud washers according to Gartner, often bending the definition of cloud computing to align with their strengths.  Their continual efforts to redefine the cloud are also designed to get their formidable customer base to upgrade to the latest generation of their applications.  Of the vendors compared they also have the greatest strength in enabling technologies, evidenced by their Exalogic and Exadata systems, Oracle Linux and Solaris operating systems.

Oracle cloud strategy

  • SAP’s cloud strategy looks to make the most of the large, highly profitable R/3 installed base while partnering with IaaS vendors to build out their cloud platform according to Gartner.  The point was made that of the vendors in the comparison, SAP prioritizes enabling technologies over owning the entire cloud stack as Oracle aspires to.

SAP Summary Chart

Bottom line: If you want to know  the truth about a given cloud vendor evaluate their Cloud Services, Professional Services track record and how well they transform enabling technologies into successful products.  The following graphic provides a summary of the vendors included in the webinar:

Summary Chart

Gartner Predicts Infrastructure Services Will Accelerate Cloud Computing Growth

public cloud computing forecast 2011 - 2016As public cloud computing gains greater adoption across enterprises, there’s an increased level of spending occurring on infrastructure-related services including Infrastructure-as-a-Service(IaaS).  Enterprises are prioritizing how to get cloud platforms integrated with legacy systems to make use of the years of data they have accumulated.  From legacy Enterprise Resource Planning (ERP) to Customer Relationship Management (CRM) systems, integrating legacy systems of record to cloud-based platforms will accelerate through 2016.  I’ve seen this in conversations with resellers and enterprise customers, and this trend is also reflected in Gartner’s latest report on public cloud computing adoption, Forecast Overview: Public Cloud Services, Worldwide, 2011-2016, 4Q12 Update Published: 8 February 2013.  Below are the key take-aways from the report:

  • Global spending on public cloud services is expected to grow 18.6% in 2012 to $110.3B, achieving a CAGR of 17.7% from 2011 through 2016. The total market is expected to grow from $76.9B in 2010 to $210B in 2016. The following is an analysis of the public cloud services market size and annual growth rates:

Figure 1 Cloud Computing Growth

  • Gartner predicts that Infrastructure-as-a-Service (IaaS) will achieve a compound annual growth rate (CAGR) of 41.3% through 2016, the fastest growing area of public cloud computing the research firm tracks.  The following graphic provides insights into relative market size by each public cloud services market segment:

Figure2

  • Platform-as-a-Service (PaaS) will achieve a 27.7% CAGR through 2016, with Cloud Management and Security Services attaining 26.7% in the same forecast period.  Software-as-a-Service’s CAGR through 2016 is projected to be 19.5%.  The following graphic illustrates the differences in CAGR in the forecast period of 2011 – 2016:

Figure 3

  • Gartner is projecting the SaaS market will grow at a steady CAGR of 19.5% through 2016, having increased the forecast slightly (.4%) since its latest published report.  Global SaaS spending is projected to grow from $13.5B in 2011 to $32.8B in 2016.
  • CRM will continue to be the largest global market within SaaS, forecast to grow beyond $5B in 2012 to $9B in 2016, achieving a 16.3% CAGR through 2016.   The highest growth segments of the SaaS market continue to be office suites (49.1%), followed by digital content creation (34.0%).  The following graphic rank orders CAGRs across all public cloud services segments from the forecast period:

Figure 4

  • 59% of all new spending on cloud computing services originates from North American enterprises, a trend projected to accelerate through 2016.  Western Europe is projected to be 24% of all spending.  A graphic comparing total spending by geography and corresponding growth rates is provided below:

Figure 5

  • The following tables provide insights into each category of public cloud computing spending throughout the forecast period.  Please click on the tables to expand them for easier reading.

Table 1

Table 2

Table 3

Source:  Forecast Overview: Public Cloud Services, Worldwide, 2011-2016, 4Q12 Update Published: 8 February 2013.

Roundup of Cloud Computing & Enterprise Software Market Estimates and Forecasts, 2013

157989221When the CEO of a rust-belt manufacturer speaks of cloud computing as critical to his company’s business strategies for competing globally, it’s clear a fundamental shift is underway.

Nearly every manufacturing company I’ve spoken with in the last ninety days has a mobility roadmap and is also challenged to integrate existing ERP, pricing and fulfillment systems into next-generation selling platforms.

One of the most driven CEOs I’ve met in manufacturing implemented a cloud-based channel management, pricing, quoting and CRM system to manage direct sales and a large distributor network across several countries.  Manufacturers are bringing an entirely new level of pragmatism to cloud computing, quickly deflating its hype by pushing for results on the shop floor.

There’s also been an entirely new series of enterprise software and cloud computing forecasts and market estimates published.  I’ve summarized the key take-aways below:

  • Enterprise sales of ERP systems will grow to $32.9B in 2016, attaining a 6.7% CAGR in the forecast period of 2011 to 2016.   CRM is projected to be an $18.6B global market by 2016, attaining a CAGR of 9.1% from 2011 to 2016.   The fastest growing category of enterprise software will be Web Conferencing and Team, growing at a 12.4% CAGR through the forecast period.  The following graphic compares 2011 actual sales and the latest forecast for 2016 by enterprise software product category.  Source:  Gartner’s Forecast Analysis: Enterprise Application Software, Worldwide, 2011-2016, 4Q12 Update Published: 31 January 2013

Figure 1 enteprise spending

Figure 2

figure 3 cloud computing

 public cloud forecast

Forrester Wave

  • IDC is predicting Cloud Services and enablement spending will hit $60 billion, growing at 26% through the year and that over 80% of new apps will be distributed and deployed on cloud platforms.  Their predictions also are saying that 2.5% of legacy packaged enterprise apps will start migrating to clouds.  Source: Top 10 Predictions, IDC Predictions 2012: Competing for 2020 by Frank Gens. You can download a copy of the IDC Predictions here: http://cdn.idc.com/research/Predictions12/Main/downloads/IDCTOP10Predictions2012.pdf

Plex Systems’ CEO Jason Blessing on the Future of ERP and Software-as-a-Service (SaaS)

Jason Blessing med HS
Last week Plex Systems, a leading provider of SaaS-based Enterprise Resource Planning (ERP) systems announced enterprise software veteran Jason Blessing has joined their company as CEO.   He is responsible for the strategic direction and growth of the company, and has a proven track record in many facets of enterprise software, from new application development to professional services.  His extensive experience includes previous executive positions at Oracle, Taleo, PeopleSoft and Price Waterhouse.  You can find his LinkedIn profile here.

Plex Systems’ success delivering ERP entirely on the SaaS platform to manufacturers have many industry analysts, experts and pundits saying their unique business model is prescient of the future of enterprise software.  Originally designed for an automotive parts manufacturer, Plex Online is being adopted by aerospace and defense, food and beverage, high tech and electronics, industrial machinery, and precision metal manufacturers.  You can find an overview of Plex Systems here.

I recently had a chance to speak with Jason and get his views on the future of ERP, SaaS in manufacturing and the enterprise, and what he sees as the greatest challenges and opportunities for Plex Systems.

Here’s a transcript of my interview with Jason Blessing, the new CEO of Plex Systems:

What are the three biggest challenges you see to Plex Systems’ growth over the long-term and how will you and the management team address them?

Our greatest challenge is awareness of who Plex Systems is and the value we are delivering to our manufacturing customers today. We’re already putting together programs that will highlight the very meaningful customer base we have and what they are able to accomplish using Plex Online.  Second, we’re going to continue making significant product investments.  Our owners are growth-minded and we’re looking to create a beachheads in additional areas to compliment our heritage in auto manufacturing.  Third, we’re going to expand our sales and marketing investments to provide better coverage domestically and in Europe and Asia. We’re also on a mission to lead the resurgence of manufacturing in America by giving small and mid-sized companies the systems they need to be formidable global competitors. 

SaaS-based applications have proved themselves in the enterprise.  How and why are manufacturers adopting SaaS-based ERP systems today?  How is this going to change in the future?

Credit has to go to Taleo and Salesforce for proving SaaS can succeed at the departmental level in the enterprise.  We’re finding that the combination of financials and Manufacturing Execution Systems (MES) delivered in the cloud is very well-suited for small and medium manufacturers.  These manufacturers often don’t have a large Information Technologies (IT) staff and want to offload these systems so they can stay focused on their core business.  In this sense we free up these smaller manufacturers to get back to work running their businesses without having to hassle with large, complex and costly ERP deployments. 

Will SaaS-based ERP systems cannibalize monolithic ERP systems or coexist and compliment them?  Or are you seeing a mix of both cannibalization and coexistence?  For Plex Systems, what’s the best direction?

We do see customer that adopt parts of our solution, quality for example, to test the cloud model before going wall to wall Plex.   Another approach we see is customers who have global operations bring foreign factories online quicker than they had in the past as a result of SaaS.  The end result will be the cannibalization of monolithic ERP systems by those that are SaaS-based.

One of the implicit factors in this area of cannibalization is the typical release cadence of a SaaS provider.  Most large cloud providers have, on average, 3 releases a year.  Here at Plex Systems we’re on a continuous release cadence.  When a customer asks for a feature enhancement or entirely new set of functions, we strive to be very responsive with our release cycles and deliver what is needed.  

Plex Systems has done well in several key manufacturing industries including automotive, A&D, electronics, food and beverage, and medical devices.  Do you see Plex Systems moving into additional industries, and if so, which ones?  Pharmaceutical and biotech for example.

We’re going to be fairly disciplined in our approach within the verticals we’re already selling into.  We’re seeing increasing interest in moving core shop floor applications to the cloud for example, and we’re going to expand out our coverage in our core vertical markets as a result.      

With the majority of sales in the United States, does Plex Systems have plans for Europe and Asia?  What’s your perspective of those markets for SaaS-based ERP system sales? 

We’re growing at an approximately compound annual growth rate of 30%+ per year, the majority of that growth coming from North America today.  We’re also seeing strong interest from EMEA, South America and Asia.  What’s driving our foreign market demand is the need manufacturers have for quickly getting production centers up and running on financials, MES and Supply Chain Management Systems (SCM).  We also run our own data centers and have hot standby and back facilities supporting our worldwide customer base.

Two-tier ERP delivers significant business value and is growing in adoption. How will Plex Systems capitalize on this trend and what are the implications for the application development priorities?

We’re delivering two-tier ERP implementations today and one of the largest heavy equipment manufacturers in the world uses Plex Online to run their shop floor operations at several manufacturing centers.  Their main ERP system is an SAP R/3 instance, and we integrate to that and help this manufacturer be more efficient at the individual plant and shop floor level.   

Plex_ColorLast year Plex Systems announced IntelliPlex, SmartPlex, in addition to several other significant new services and partnerships.  Of these, IntelliPlex has the potential to deliver analytics and business intelligence to manufacturers who may have never had these metrics available before.  How do you see analytics in manufacturing improving this year, and how will this augment Plex Online’s analytics strategy going forward?

Much of our success as a provider of SaaS-based ERP systems is due to the breadth of applications that span from the shop floor to the top floor. We’re seeing analytics resonate really well with the people who write us the checks, the top floor executives and their teams responsible for the getting the highest performance from manufacturing operations.  We’re going to augment our analytics this year, supporting mobile devices.  We’ve also been doing data mining of production data across the worldwide Plex Systems customer base and see the potential to create an index of manufacturing performance. We’re going to look at how this data will be able to help our customers predict economic conditions in their specific manufacturing industries. 

There are a myriad of studies out on the impact of mobile technologies on manufacturing.  Last year, Plex Systems introduced SmartPlex Mobile, which gives ERP users access to data on iOS and Android devices.  Can you discuss the challenges of mobile adoption in manufacturing and how Plex Systems will address them?

Often mobile technologies installed and used on the factory floor are proprietary to the systems and workflows for that specific factory.  They are fine-tuned to the specific workflows on the factory floor, and the proprietary nature of their electronics only work with the systems they are designed for and Plex Online supports many of these devices.  Material handling, RFID and other logistics projects are based on these kinds of technologies.

We’ve also found that senior management teams want to get as close to real-time data as possible on each phase of manufacturing operations.  SmartPlex Mobile is designed to give senior management teams visibility into operations on Android and iOS devices, and continues to gain interest from existing and new customers alike.

Many manufacturers are dealing with “brain drain” or the retiring and churn of their long-time manufacturing, process control, and quality management professionals.  How do you see Plex Systems helping these manufacturers to retain that tacit knowledge in their organizations over their long-term?

We talk quite often about this with our prospects, customers and internally in our development meetings.  Prospects are especially interested in how to solve this problem as tribal knowledge is often the most difficult to capture and re-use.  It’s common to find manufacturers with a myriad of Microsoft Access databases, legacy systems and data locked on spreadsheets. Our architecture is based on a Master Data Management (MDM) model with gives manufacturers a single source or version of the truth.  Using our experience implementing these systems in small and medium-sized manufacturers, we’ve found methods and techniques for managing corporate-wide data effectively.

Visualization in manufacturing including the extensive use of 2D and 3D CAD drawings is also accelerating.   What are your thoughts on the future of visualization in manufacturing, and more specifically, which key process areas do you see Plex Systems addressing with its visualization strategy?

This area is critically important for the shop floor as it can drive higher levels of production quality quickly. We’re going to continue to invest in this area, and our Actify partnership gives us a strong foundation to build on in this area.  The partnership with Actify allows us to embed engineering drawings directly in Plex, allowing shop floor workers to look up specifications on the fly to ensure high levels of quality.  The drawings are highly valuable because they are contextualized in Plex (e.g., tied to the product in question) and don’t require any expensive CAD equipment or training to view.

Plex Systems has also built a strong foundation of partners including system integrators and resellers.  Do you anticipate Plex Systems will increasingly rely on resellers or stay with primarily a direct sales strategy?  

It’s very important to high fidelity relationships with customers when you’re selling SaaS-based enterprise software so the direct model is important to us.   That said, partners are also very important to us because of the value they can bring to customers and the added reach they can provide us.  So, we’ve been successful in creating a partner program, which has a rigorous certification process that ensures those we partner with have strong domain expertise to serve our shared customers.  Partners can quickly become a force multiplier for us, and we’re working towards that goal by keeping direct sales in balance.   

Disclaimer: This interview was done independent of Plex Systems. I have not and have never been a paid consultant of the company.  I approached them to do this interview based on insights gained from WordPress analytics showing readers’ interest in ERP, SaaS and enterprise software.

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