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Posts tagged ‘CRM’

Why Salesforce Is Winning The Cloud Platform War

300px-Salesforce_Logo_2009The future of any enterprise software vendor is being decided today in their developer community.

Alex William’s insightful thoughts on Salesforce Is A Platform Company. Period. underscores how rapidly Salesforce is maturing as a cloud platform.  And the best measure of that progress can be seen in their developer community.

(To be clear, Salesforce and the other companies mentioned in this post are not clients and never have been.  I track this area out of personal interest.)

DevZone force.com

The last four years I’ve made a point at every Salesforce Dreamforce event to spend the majority of my time in the developer area.  Watching mini hacks going on in the DevZone, mini workshops, the Salesforce Platform and Developer keynotes over the last few years has been a great learning experience.  An added plus: developers are often skeptical and want to see new enhancements help streamline their code, extend its functionality, and push the limits of the Force.com platform. This healthy skepticism has led to needed improvements in the Force.com platform, including a change to governor limits on Application Programmer Interface (APIs) performance and many other enhancements.  Despite the criticisms of Force.com being proprietary due to Apex and SOQL, the crowds at developer forums continue to grow every year.

I’ve started to look at the developer area as the crucible or foundry for future apps.  While the Cloud Expo shows how vibrant the partner ecosystem is, the developer area is where tomorrow’s apps are being coded today. The Force.com Workbook, an excellent reference for Force.com developers, was just released October 1 and DeveloperForce shows how far the developer support is matured in Salesforce.  In addition a new Force.com REST API Developer’s Guide is out just last month.

The Journey From Application To Platform

In visiting the developer area of Dreamforce over the last four years I’ve seen indications that Salesforce is successfully transforming itself into a cloud platform business:

  • Significant jump in the quantity and quality of developer attendees from 2010 to 2012.  The depth of questions, sophistication of code samples, calls for more flexibility with governor limits, and better mobile support typified these years.
  • Steady improvement to visual design tools, application development environment and support for jQuery, Sencha and Apache Cordova.
  • The steady maturation of Salesforce Touch as a mobile development platform and launch of Salesforce Platform Mobile Services Launched in 2011, this platform continues to mature, driven by developer’s requirements that reflect their customers’ needs for mobility support.  HTML 5 is supported and the apps I’ve seen written on it are fast, accurate and ideal for customer service.  ServiceMax has created exceptional mobile apps including their comprehensive ServiceMax for iPad app on the Force.com platform.
  • 2012: Rise of the Mobile Enterprise Developer.  Salesforce’s enterprise customers in 2009 weren’t nearly as active as they were last year with questions on legacy systems integration and how to create web services capable of integrating customer data.  2011 was a breakout year in mobile app development with 2012 showing strong momentum on mobile web services development.  I expect this year’s Dreamforce developer community to reflect the rapidly growing interest in mobile as well.

How Enterprise Applications Make The Salesforce Platform Work For Them

In speaking with Salesforce developers over the years one of my favorite questions continues to be “what is the real payoff of having a native Force.com application in your company?”  Initially I thought this was marketing spin from enterprise software vendors attempting to use features as benefits, however after a closer look it is clear that the platform has significant advantages, especially for any solution requiring global deployments or large numbers of users.  Here is what I found out:

  • The investments Salesforce.com has made in their cloud infrastructure over several years (and continue to make) has resulted in a platform that developers  are leveraging to rapidly deliver enterprise applications that deliver world-class performance, reliability, and security.
  • Of the many native Force.com applications that extend Salesforce beyond CRM, it’s been my experience the most challenging are Configure-Price-Quote (CPQ) and contract management.  Creating a single system of record across these two areas is challenging even outside of Force.com, which is why many companies in this space have two entirely different product strategies.  Apttus is the exception as they have successfully created a unified product strategy on Force.com alone.  I recently had the chance to speak with Neehar Giri, President and Chief Solutions Architect.  “Apttus’ strategic decision to deliver our enterprise-class applications natively on the Salesforce platform has allowed us to focus on our customer needs, meeting and exceeding their expectations in both functionality and speed of innovation,” said Neehar Giri, president and chief solutions architect, Apttus.  “We’ve seen the platform evolve rapidly in its capabilities and global scalability.  Apttus’ customers have and continue to benefit from the true multi- tenancy, world class security, reliability and performance of the Salesforce Platform.”
  • Salesforce.com’s multi-tenant architecture allows for optimization of computing resources resulting in savings and significant gains in efficiency for global enterprises even over applications deployed on private clouds.
  • Native Force.com applications share the same security model as Salesforce apps.  Financialforce.com chose to develop their accounting, ordering and billing, professional services automation and service resource planning entirely on the Force.com architecture due to shared master data, multi- tenancy, world class security, reliability and performance.  This shared architecture also benefits enterprise consumers of native applications by providing best-in-class uptime.
  • Native Force.com applications are contributing to greater return on investment (ROI). IT often does not need to manage data integration or sync issues, upgrades to even large numbers of users are easily deployed, and users can remain in a familiar interface.   These benefits support faster and easier deployment as well as rapid user adoption both of which are critical to success and a high ROI for any solution. Enterprise developers have often mentioned the familiar interface and ease of deployment have led to higher rates of adoption than any other approach to delivering new application functionality.
  • Advanced APIs to support integration of legacy applications not on the Force.com platform.
  • Proven ability of Salesforce.com to support global deployments.  The company has expanded its global support centers.  Salesforce.com also publishes real-time statistics on system status: http://trust.salesforce.com/trust/.
  • A continuing acceleration of new capabilities resulting from increasing numbers of developers driving the advancement of the platform through their collective input, suggestions and requirements.
  • Ability to design applications that respond with greater customer insight and intelligence across mobile devices.  ServiceMax has an impressive series of mobile applications that do this today.  I had a chance to speak with David Yarnold, their CEO about his vision for the company.  He wants to give ServiceMax’s customers the ability to deliver flawless field service where every interaction is perfect.  By building on the Force.com architecture he explained how each service customers’ contextual intelligence can be seen in real-time by everyone involved in serving customers.  Clearly ServiceMax is capitalizing on the mobile development platform area of Force.com as well.

Bottom Line: Enabling developers to attain greater revenue growth, while creating an extensive mobile app development platform is further proof Salesforce has turned the corner from being an application company to a platform provider.

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.  

What’s Hot In CRM 2013: Strong Interest In Mobile For Streamlining Sales And Service

Whats Hot in CRM 2013 imageGartner published the report What’s Hot in CRM Applications in 2013, by Ed Thompson on June 20, 2013.  The report covers areas of interest by clients in the four areas of marketing, sales, customer service and e-commerce.

The report states that “the 2013 What’s Hot list was compiled after examining Gartner inquiry volumes by topic. It was then supplemented by asking all Gartner CRM analysts to offer their opinions on what has been generating the most interest during all the client inquiries they have taken since the end of 2012 and in the beginning of 2013.”

Big data, cloud, social, mobile and the Internet of Things are the five catalysts that are driving inquiries in the hottest areas of interest.  Gartner’s Ed Thompson, author of the report, states that “this is where our clients’ interests lie, although not their current CRM spending.”  Technologies highlighted in red are the hottest in terms of interest, shown in the following table Highest CRM Application Priorities for 2013.

What This Says About the Future of CRM

Mobility is just one part of delivering an excellent customer experience.

  • It is surprising that Gartner clients aren’t looking to create a more unified strategy to customer experience across all channels at all times. As the report states, “The refreshing of an aging agent desktop with a new, more intelligent and unifying user interface has shot to the top of the heat charts once more.” The findings of this Gartner analysis make the highly promoted claims of usability by many CRM vendors look overly hyped.  I think usability is the fastest path to greater system adoption of any CRM system, and that has to include mobile.  It is surprising that a related technology in this area didn’t rise farther in the rankings.
  • Second, mobile sales on smartphones and tablets dominate, followed immediately by Social – Internal Collaboration and Social – Integration with Social Data. What is fascinating about this group of four top items in Sales is the indication that the behavior of how sales teams work individually and together is changing fast. Collaboration is a strong catalyst for Return on Investment (ROI) from social technologies and the sequence of these priorities in Sales underscores that.
  • Third, the vision of the mobile-enabled support representative able to be autonomous yet fully supported to solve customer problems is rapidly approaching.  Of all patterns emerging from this data, this is one shows the greatest profit potential.  Service Lifecycle Management (SLM) and the many forms of service management all have very significant profitability associated with them for manufacturers.  The quicker this area of mobility moves, the faster SLM and Maintenance, Repair and Overhaul (MRO) strategies will grow – giving manufacturers and service providers the ability to mine their installed bases for more profits.
  • Fourth, predictive analytics and big data are reordering how marketing strategies are designed, implemented and managed.  Given the increasing complexity of marketing automation systems and the strategies they support, predictive analytics and big data are starting to dominate the conversations I’ve personally had with Chief Marketing Officers (CMOs) and many demand generation professionals.  I expect the predictive analytics aspects of marketing, combined with big data, to accelerate quickly over the next year.
  • Fifth, the rapid adoption of mobile-based platforms including the Apple iPad in the Configure, Price, Quote (CPQ) continues throughout the professional services, discrete and process manufacturing companies I often visit.  One manufacturer I often work with on their CPQ strategies has the ability today to present a completed 3D model of the proposed product, embed it in a quote and e-mail it to the prospect all from an iPad.  The future of CPQ is going to be dominated by mobility and enterprise support for key order management, pricing and product configuration options.
 Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Gartner Predicts CRM Will Be A $36B Market By 2017

CRM in 2017The latest enterprise software forecast from Gartner shows Customer Relationship Management (CRM) increasing to a $36.5B worldwide market by 2017, a significant increase from the $20.6B forecasted in Q1 of this year.  CRM also leads all enterprise software categories in projected growth, showing a 15.1% CAGR from 2012 to 2017, also revised up from 9.7% in the Q1 forecast.

The latest round of forecasts published in the report,  Gartner Forecast: Enterprise Software Markets, Worldwide, 2012-2017, 2Q13 Update shows CRM eclipsing ERP in worldwide market size in 2017.  The following graph compares the relative growth of CRM, ERP, Business Intelligence (BI), Supply Chain Management and Web Conferencing, Collaboration/Social Software Suites.  Source: Gartner Forecast: Enterprise Software Markets, Worldwide, 2012-2017, 2Q13 Update.  Please click on the image to increase its size for easier reading.

Figure 1 Forecast

Key Take-Aways

Figure 2 Forecast

  • Worldwide enterprise software spending is projected to be $304B in 2013 in the latest forecast, up from $279B in the Q1 forecast. Gartner claims stronger demand for CRM, supply chain management and security are leading to accelerating market growth.
  • ERP spending worldwide is projected to grow from $26.03B in 2013 to $34.3B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of 7%.
  • Business Intelligence (BI) worldwide is projected to grow from $14B in 2013 to $18.6B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of 7.3%.
  • Supply Chain Management (SCM) worldwide is projected to grow from $9.16B in 2013 to $13.6B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of 10.4%.
  • Data Integration Tools and Data Quality Tools worldwide are projected to grow from $4B in 2013 to $6B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of  10.3%.

 Bottom Line:  Gartner’s latest forecasts show that enterprises are realizing the most valuable assets they have are solid, long-term customer relationships.  Trust really is the new currency, as my friend Michael Krigsman often says.

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.

2013 CRM Market Share Update: 40% Of CRM Systems Sold Are SaaS-Based

CRM-Market-Share-Analysis-Image-2012Last year, four out of every ten CRM systems sold were SaaS-based, and the trend is accelerating.

In the recent Gartner report  Market Share Analysis: Customer Relationship Management Software, Worldwide, 2012 published April 18, 2013 the authors provide insights into why the worldwide CRM market experienced 12% growth in 2012, three times the average of all enterprise software categories.  Gartner cites demand they are seeing from their enterprise clients for CRM systems that can help acquire customers, analyze and act on customer behaviors, and increase all-channel management performance.  Big data inquiries are also increasing in CRM, driven by the interest enterprise clients have in getting more value from social network data and interactions.

Key take-aways from the report include the following:

  • The CRM worldwide market grew from $16B to $18B attaining a 12.5% growth rate from 2011 to 2012.
  • 80% of all CRM software in 2012 was sold in North America and Western Europe.    North America CRM sales grew 16.6% from 2011 to 2012.  The highest growth regions of CRM sales between 2011 to 2012 included Greater China (26.9%) and Latin America (24.3%).
  • Salesforce.com is the world’s leading CRM software vendor with 14% market share in 2012 ($2.5B in sales), surpassing SAP (12.9%, $2.3B in sales), Oracle (11.1%, 2.01B in sales), Microsoft (6.3%, $1.1B in sales), IBM (3.6%, $649M in sales) and all others.  The top ten vendors worldwide generated $10.9B in sales alone in 2012.

Figure-1-Market-Share-CRM

  • Worldwide CRM software spending by subsegment shows Customer Service and Support leading all categories with 36.8% of all spending in 2012 ($6.6B), followed by CRM Sales (26.3%, $4.7B), Marketing (includes marketing automation) (20%, $3.6B) and e-commerce (16.9%, $3B).   The following chart shows the distribution of revenue by category:

CRM-Software-Subsegments

  • 40% of all CRM software sold in 2012 worldwide was SaaS-based.  Gartner states that they are seeing their enterprise clients seek out easier-to-deploy CRM systems compared to on-premise alternatives.  The report states that many enterprises are now replacing their legacy systems with SaaS-based CRM systems as well.  Enterprise clients also report that SaaS-based CRM systems are delivering net-new applications that deliver complementary functionality not possible with legacy and previous-generation CRM platforms.
  • Ten fastest growing CRM vendors as measured in revenue Annual Growth Rate (AGR) in 2012 include Zoho (81.2%), Hybris (78.6%), Teradata (70.4%), Bazaarvoice (56.2%), Marketo (54.3%), Kana (44.2%), Demandware (43.9%), IBM (39.4%), Technology One (37.1%) and Neolane (36%).
  • Communications, media and IT services were the biggest spenders on CRM in 2012 due to their call center requirements.  Manufacturing including Consumer Packaged Goods (CPG) was second, and banking & securities were third.

Why Cloud Computing is Accelerating in the Enterprise

Cloud computing gaining in the enterprise Translating time into dollars matters far more to many CEOs I’ve spoken with versus what platform their applications are running on.

What matters most is getting all they can out of every hour their business is operating.  They are all focused on getting beyond the constraints that held their growth back in the past – everyone wants a growth accelerator today.  For manufacturers especially, this includes applications with depth of functionality that can be quickly deployed regionally, and in more cases than ever, globally as well.  Line-of-business leaders want applications that make an immediate impact on their entire value chain.

Just having a cloud strategy is not enough for any enterprise software company anymore. Owning the pain prospects and customers go through daily to get work done is all that matters.  Every application and platform component needs to contribute to the goal of reducing customer’s challenges of doing business.  In studying companies who excel at this, I’ve often used stock market indices to see how they compare to market averages and their competitors.

Charting Progress Using the Cloud Computing Stock Index

Creating and using stock indices to track the performance of specific industry and market sectors is a great way to cut through hype.  I’ve been using these for over a decade to track industries and markets of interest, and have built the Cloud Computing Stock Index. You can download the latest summary here.  If there are companies you think need to be included please let me know.  I deliberately left out IBM, Google, Microsoft, Oracle and SAP as a prerequisite is that a firm derive at least 50% or greater revenue from cloud-based applications and services.

The graph below shows all-time performance of the Cloud Computing Index relative to Microsoft, Salesforce.com. NetSuite and Workday.

Figure 1 stock index

Key Take Aways

  • NetSuite posted a 62.6% increase in stock performance, followed by Workday (+20.57%), Salesforce (+4.23%) and the Cloud Computing Index (+4%) with Microsoft seeing a 8.18% decline in share price during the period.
  • NetSuite, Salesforce and Workday continue to gain new customers in the mid-tier and enterprise areas of the market based on depth of functionality, rapid application development (RAD), and increasing success creating alliances with system integration, selling and technology partners.
  • Workday’s expertise in Human Capital Management is accentuated by the depth of analytics and trend analysis and expertise in cloud-based integrations.  Their depth of functional expertise in these areas is leading to rapid growth.
  •  NetSuite is succeeding with its two-tier ERP selling strategy against long-standing ERP vendors including Oracle, SAP and others.

Bottom line:  Salesforce, NetSuite and Workday show how developing cloud-based applications designed for ease of use and speed of deployment are winning new customers in the enterprise – and driving up their stock price as a result.

Specifics on the Cloud Computing Stock Index

I used The Cloud Times 100 as the basis of the index, and included the 23 following companies, all of which are publically traded.  These include:

  • Akamai Technologies.
  • Amazon.com, Inc.
  • ARM Holdings plc
  • CA, Inc.
  • Cisco Systems, Inc.
  • Citrix Systems, Inc.
  • EMC Corporation
  • F5 Networks, Inc.
  • Fusion-IO, Inc.
  • Intuit
  • Juniper Networks, Inc.
  • Keynote Systems, Inc.
  • NetSuite Inc
  • Qualys Inc
  • Rackspace Hosting, Inc.
  • Red Hat, Inc.
  • Riverbed Technology…
  • Salesforce.com, inc.
  • Symantec Corporation
  • Trend Micro Incorporated
  • VMware, Inc.
  • Websense Inc.
  • Workday Inc

 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.  

21 Most Admired Companies Making IT A Competitive Advantage

time-and-IT-competitive-advantage1-300x215All enterprises, regardless of what they produce or the services they deliver, are really information businesses.

The accuracy, speed and precision of IT systems means the difference between winning or losing customers, keeping supply chains profitable, and solidly translating new concepts into revenue-producing products and services.  The world’s best-run services businesses have customer-driven IT as part of their DNA; it is very much who these companies are internally.

In the recently published Garter report CEO and Senior Executive Survey 2013: 21 Top Companies Admired for Competitive IT  completed between October and December, 2012, which was part of the 2013 CEO and Senior Business Executive Survey, C-level respondents were asked to name the companies they most admired in terms of their ability to apply IT-related business capabilities for competitive advantage.   Respondents were also asked to limit their responses only to their own and related industries.

391 respondents participated in the survey with 147 being CEOs, 149, CFOs; 49, COOs; and 46 being board members including Chairman of the board and president.  Geographic distribution included 152 respondents from North America; 124 from Europe; 78 from Asia/Pacific; 20 from Brazil; 12 from South Africa; and 5 from the Middle East with minimum company size being $250M in annual sales or above.

The following is the list of the world’s most admired companies using IT for competitive advantage.

Most Admired Companies Making IT A Competitive Advantage

Accenture
Amazon
Apple
Cleveland Clinic
General Electric
Goldman Sachs
Google
Hospital Corporation of America
IBM
Intermountain Healthcare
JP Morgan Chase
Kaiser Permanente
Mayo Clinic
Microsoft
Nestle
Proctor & Gamble
Progressive Insurance
Schlumberger
Target
Toyota
Wells Fargo

Key Take-Aways

  • Customer-driven IT is the single most admired trait of all 21 companies in the list.  Associated with this attribute is the proven ability of these enterprises to manage complex e-commerce systems & platforms, support multichannel management, in addition to continually show the ability to innovate quickly.
  • Enterprises need to consider how the business successes their investments in  IT are enabling can be used for branding and recruitment.   Providing benchmark performance data and stories of how IT helped create entirely new markets and solve customer problems needs to be used for recruiting.  Many of the 21 companies mentioned are doing this, using success stories as a catalyst for driving recruitment efforts for analytics, cloud computing and systems integration experts.
  • Don’t underestimate the disruptive power of cloud computing and mobility to completely re-order enterprise systems quickly.  Gartner mentions that there are enterprises whose IT organizations would have made the list had they not slowed down.  While not directly stated, Gartner warns IT departments to not become complacent over time.  From personal experience working in IT departments however, it is clear that complacency is a leading career hazard.  It’s imperative for CIOs to keep challenging their organizations to stay intensely focused on new developments, seeking out how they can be used to strengthen business strategies.
  • Four of the top five factors that most impressed respondents about the admired companies are customer-related.  Customer-facing IT (15%); followed by an integrated/standardized/unified IT organization and process framework (13%); exceptional use of CRM (11%); customer-centered innovation (9%);  and product design & offerings (9%) are the most mentioned attributes of the highest-performing companies. Multiple responses were allowed to this area of the survey.  The following graphic provides an analysis of which factors most impressed the C-level executives who were respondents to the survey.

What Impressed Business Leaders Most

Why Cloud Computing Is Slowly Winning The Trust War

Cloud computing Seeing skeptical CIOs agree to cloud-based pilots of Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and other applications is evidence of how cloud computing is slowly winning the trust war.

Further evidence can be seen from how skeptical many of these CIOs initially were, and how successful pilots led to their gradual trust.

This trust hasn’t come cheap however.

Every one of these CIOs spoken with, across a range of manufacturing companies, learned that Service Level Agreements (SLAs) aren’t sufficient to manage the areas of security, privacy and confidentiality on their own.  Cloud computing vendors have used SLAs as a means to imply security standards are met; one CIO told me he had an audit done to see if the SLA targets promised were realistic.  They weren’t and he moved on to another vendor.  That is the level of skepticism and lack of trust many CIOs initially have about the cloud today.  Add to that how much Europe doesn’t trust the cloud, and any CIO of a manufacturing or services business that has operations globally has ample reason to be skeptical about cloud computing.  The highly visible failures of Amazon, Apple, Google, Microsoft continues to fuel skepticism and distrust of cloud computing as well.

Despite these factors, cloud computing is slowing winning the trust war.  Here are the key take-aways from my conversations and visits with CIOs and their departments over the last two weeks:

  • Service Level Agreement (SLA) claims of security, privacy and confidentiality often only partially cover the unique needs of a given business – rarely all of them.  CIOs complained that the SLAs they were initially given for cloud pilots by vendors lacked any insight into their core business, how it operated, and how the cloud-based applications could contribute greater insight and intelligence.  Only after several revisions and additions of performance measurements tied to business strategies did these skeptical CIOs let the pilots go on.  Model contracts for defining privacy, for these CIOs, are also losing credibility.  These CIOs forced the issue of a highly specific privacy plan from vendors and got them.
  • For global cloud deployments, CIOs viewed the development a roadmap and plan for how to deal with transborder data flow restrictions and in-country compliance for data confidentiality, security and personal information protection as critical.  One manufacturing CIO is setting up a two-tier ERP system throughout Europe has to first define the global privacy regulations across each nation and province.  Depending on the European nation this could include defining the physical location, contents and specific configuration of every server used.  Germany has among the most intensive data protection rules and requirements, which further require intensive roadmap and plan development to stay in compliance.
  • The most skeptical CIOs run scenario tests of full data and record extractions during pilots.  This is a safeguard in case the relationship with the cloud provider goes badly, and also to make sure they can quickly get their data back and avert vendor lock-in.  As part of this many CIOs want to see proof that data deletion has worked correctly on the provider’s servers.
  • The most trustworthy cloud computing pilots quickly move beyond basic analytics including ROI to deliver expertise and knowledge specific to the clients’ business.  This is the most powerful dynamic of all in the victories cloud computing is having in the trust war.  When a cloud pilot moves beyond showing how it can automate a process – say payroll for example – and starts making contributions to the expertise and knowledge of a company, trust grows quickly.   At that point trust becomes an accelerator for cloud computing and the platform and applications become part of the IT strategy of a business.

Bottom line:  Trust is the greatest accelerator there is in cloud computing’s growing adoption, and that’s earned when cloud applications get beyond simple metrics to delivering insights and useful intelligence on secured platforms.

Thank you Cindy Jutras and Lisa Lincoln for your contributions and insights on this as well.

Additional Reading and References:

Demirkan, H., & Goul, M. (2013). Taking value-networks to the cloud services: Security services, semantics and service level agreements. Information Systems and eBusiness Management, 11(1), 51-91.

Khan, K. M., & Malluhi, Q. (2010). Establishing trust in cloud computing. IT Professional Magazine, 12(5), 20-27.

John C. Roberts, II , Wasim Al-Hamdani, Who can you trust in the cloud?: a review of security issues within cloud computing, Proceedings of the 2011 Information Security Curriculum Development Conference, p.15-19, September 30-October 01, 2011, Kennesaw, Georgia

Rodero-Merino, L., Vaquero, L. M., Caron, E., Muresan, A., & Desprez, F. (2012). Building safe PaaS clouds: A survey on security in multitenant software platforms. Computers & Security, 31(1), 96. Link: http://hal.archives-ouvertes.fr/docs/00/65/73/06/PDF/RR-7838.pdf

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
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