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Posts tagged ‘Selling SaaS Applications’

Predicting Enterprise Cloud Computing Growth

69% of enterprises who have separate budgets for cloud computing are predicting spending increases this year and into 2014.

This is one of several key take-aways from a research study published today by TheInfoPro, a service of 451 Research.  TheInfoPro Wave 5 Cloud Computing Study is based on research completed in the first six months of 2013, and relies on live interviews with IT management and primary decision-makers in midsize and large enterprises in Europe and North America. You can view details of TheInfoPro Cloud Computing Overview Program and methodology here.

Additional key take-aways from the study include the following:

  • The worldwide cloud computing market will grow at a 36% compound annual growth rate (CAGR) through 2016, reaching a market size of $19.5B by 2016.
  • 38% of enterprises surveyed break out cloud computing budgets, while 60% include cloud-related spending as part of their enterprise-wide IT budgets.  TheInfoPro asserts that cloud computing’s benefits of greater business orchestration and reduced time-to-market have led to a change in budgeting approaches.
  • The median enterprise cloud computing budget is $675,000 and the mean enterprise cloud computing budget is $8,234,438.  The study found the largest enterprise cloud computing budget at $125M.  The following graphic provides a distribution of cloud computing budgets by range.

cloud-computing-budget

  • Internal Private Cloud (35%), Cloud Provider Assessments/Strategy Planning (33%), Infrastructure-as-a-Service (IaaS) (31%) and Software-as-a-Service (30%) are the top four cloud computing-related projects enterprises are working on right now.  Cloud Provider Assessments/Strategy Planning have seen the largest increase, attributable to more enterprises looking to better support strategic plans with more agile, efficient IT organizations.

top-challenges-graphic2

  • 83% of enterprises face significant roadblocks that hold them back from moving beyond cost reduction to faster time-to-market and better orchestration of their businesses. Respondents mentioned that politics, budget, time and staff are the main sources of roadblocks to getting more value out of their cloud computing investments. The majority of these roadblocks are not related to IT.  They include lack of clarity regarding organization and budget (37%), resistance to change (16%) and lack of trust (visibility and reliability) (15%).  The following graphic illustrates the enterprise cloud journey as defined in TheInfoPro Wave 5 Cloud Computing Study.

deciphering-the-cloud-journey

  • Consistent with many other enterprise cloud computing surveys, security is the biggest pain point and roadblock to cloud computing adoption (30%).  Migration and integration of legacy and on-premise systems with cloud applications (18%) is second, and lack of internal process (18%) is third.  The following graphic shows a rank ordering of cloud computing-related pain points.

cloud-related-pain-points

Top 12 Sites For Free Cloud Computing & Enterprise Software Research

campusOne of the most common questions I get from students is where they can find free cloud computing and enterprise software research.

Few if any of my students work for companies who have subscriptions with the top analyst firms however.  A small group of students are working on a start-up on the side and want to absorb as much market data as they can.

Many of my former students are also in IT management roles, and when they become interested in a specific cloud computing or enterprise topic over time, they write me and ask if I have any data on their subject of interest.  I keep the following list updated from them too.   To serve all these students I’ve been adding to the list shown below for a number of years. None of these companies are current or past clients and I hold no equity positions in any of them.

The requests are so prevalent in global competitive strategy courses I distribute this list at the beginning of the semester with the following disclaimers.

  • Many of the cloud computing and enterprise software companies pay to have white papers written and research done.  Writing white papers and doing research for an enterprise software vendor client is a very lucrative business for many industry analyst firms.  Ethical industry analysts will often insist that a disclaimer be included in the white paper and on the website stating that they and their firms were hired to write the paper or do the research and publish the report.
  • The reports are intellectual property of the firms publishing them.  Enterprise software vendors often pay tens of thousands of dollars at a minimum for reprint rights and the right to provide them on their websites.  I advise my students to seek out the copyright and quote policies of the research firm of interest if they plan on re-using the graphics in any published materials or in their blog posts.  One for example, the Gartner Copyright and Quote Policy is shown here.
  • Pay attention to the methodologies used in each report and realize they change over time.  This is especially the case with the  Gartner Magic Quadrant and MarketScopes. Gartner has been very active this year in refining the Magic Quadrant methodology for example.

The following are the list of cloud computing and enterprise software vendor sites that offer free downloads of cloud computing and enterprise software research:

  • Amazon Web Services – Amazon has purchased re-print rights to the Gartner Magic Quadrant for Cloud Infrastructure as a Service written by Lydia Leong, Douglas Toombs, Bob Gill, Gregor Petri, Tiny Haynes published on August, 19, 2013 in addition to the latest reports from Forrester on enterprise public cloud platforms and enterprise cloud databases. Link:    https://aws.amazon.com/resources/analyst-reports/
  • BMC Software – Many free reports from Gartner, Forrester, The 451 Group and other research firms covering advanced performance analytics (APA), cloud computing, IT Service Management and long-term technology trends. Link: http://www.bmc.com/industry-analysts/reports/
  • Computer Associates – An extensive collection of cloud computing and enterprise software research organized into the following categories: cloud; data management; energy and sustainability management; IT automation; IT security; IT service management; mainframe; project and portfolio management; service assurance and virtual organizations.  CA requires opt-in on the latest research as they use this site as part of their lead generation strategy.  Link: http://www.ca.com/us/collateral/industry-analyst-reports.aspx
  • Cisco Systems -  Data Center and Virtualization; includes the latest Current Analysis, Forrester, Gartner, IDC, Lippis and Yankee Group research reports covering Big Data, blade servers, cloud computing, Hadoop, unified data centers and many other topics.  Be sure to click across the Computing, Network, Orchestration/Automation,  and Network Services tabs to find additional research:   Link: http://www.cisco.com/en/US/solutions/ns340/ns857/ns156/ns1094/analyst_reports.html
  • Hewlett-Packard – HP has invested primarily in networking-related analyst research including the latest studies and market frameworks from Forrester, Gartner, IDC and Infonetics Research.  Link: http://h17007.www1.hp.com/us/en/networking/ar/index.aspx#.Uhp-ERufg-J
  • Intel – Organized around the topic of designing a data center for the cloud, Intel is providing a series of research studies, reports, white papers and videos that provide insights into virtualization, networking, mobility and Intel-based servers running cloud architectures.  Link:  http://www.intel.com/content/www/us/en/cloud-computing/cloud-computing-analyst-reports.html
  • Microsoft – Balancing the need to support their enterprise applications today and create demand for cloud-based initiatives now and in the future, Microsoft’s series of analyst reports reflect their evolving business model.  Microsoft has licensed the latest research from Enterprise Strategy Group (ESDG), Forrester, Gartner, IDC, Ovum, Yankee Group and others listed on this site. Link: https://www.microsoft.com/en-us/news/itanalyst/
  • Oracle - The most comprehensive collection of industry analyst research online for any enterprise software vendor, Oracle has hundreds of research reports available for viewing under their reprint licenses for free, and also for download.  The reports are organized into corporate, infrastructure, systems, services, solutions, industries, enterprise applications and regions.     Link: http://www.oracle.com/us/corporate/analystreports/index.html
  • Progress Software – Extensive collection of research from Bloor, Forrester, Gartner, IDC, Tabb Group, Ovum and other research firms are available for download from this site. Link:  http://www.progress.com/en/inthenews/analyst-reports.html
  • SAS – The most extensive and well-organized online collection of analyst research on analytics and business intelligence (BI) available, SAS makes research available from fifteen analyst firms across six industries on this area of their website.  You can find the SAS Analyst Viewpoints section of their website here: http://www.sas.com/news/analysts/
  • Symantec – Provides downloadable analyst reports in the areas of risk and compliance, endpoint security and management, information and identity protection, messaging security, backup and archiving, storage and availability management, services and emerging trends.  ESG, Info-Tech Research Group, Forrester, Gartner and IDC reports are on this page for download. Link: http://www.symantec.com/about/industryanalysts/analystreports.jsp
  • Teradata – Extensive collection of industry analysis and research organized into the sections of Active Data Warehousing, Active Enterprise Intelligence, Enterprise Data Warehousing, Teradata Analytical Ecosystem and Teradata Integration Analytics.  The latest market frameworks from Gartner, Forrester, IDC and other research firms are available for download.  Link:   http://www.teradata.com/analyst-reports/

IDG Cloud Computing Survey: Security, Integration Challenge Growth

cloud computing survey 2IDG Enterprise recently published Cloud Computing: Key Trends and Future Effects Report, showing how enterprises continue to struggle with security, integration and governance while finding immediate value in collaboration and customer relationship management (CRM) applications.

IDG’s methodology is based on interviews with 1,358 respondents, stratified across CIO, Computerworld, CSO, InfoWorld, ITworld, and Network World websites, in addition to respondents contacted via email, and LinkedIn forums.  58% of respondents are from executive IT roles; 17% from Mid-level IT; 14% from IT professionals; 8% from middle-level business management and 3% non-manager roles were represented in the study.  High tech industries are the dominant industry represented with 18% of respondents, followed by financial services, government and manufacturing (each accounting for 10% of respondents).  Education (9%) and telecommunications & utilities (6%) are the other industries represented.

Key take-aways from the survey include the following:

  • 49% of executive-level management see cloud computing as transformational to their business strategies.  40% are currently having their IT staff investigate the potential of cloud computing contributing to their businesses, 5% don’t see cloud as an option and 6% aren’t sure.
  • Amazon (32%), Microsoft (23%) and Google (20%) are most often considered thought leaders in the field of cloud computing by respondents to the IDG survey.
  • Enabling business continuity (43%), greater flexibility to react to changing market conditions (40%), speed of deployment (39%) and improving customer support or services (38%) are the top four drivers of investment in cloud computing technology according to the survey.  The following graphic provides an analysis of each driver by level of relative importance.   This image is from Cloud Computing: Key Trends and Future Effects Report.

  • Accelerating business value by providing access to critical business data and applications (56%); serving as a catalyst of IT innovation (56%); enabling greater employee collaboration (54%); and enabling greater levels of IT agility (54%) are the top four benefits enterprises are gaining from cloud-based applications.  The following graphic provides an analysis of how cloud computing technology is impacting each of the areas shown in respondent’s enterprises. This image is from Cloud Computing: Key Trends and Future Effects Report.

  • Financial Services and high tech companies are projected to have the largest cloud computing budgets based on the survey.  Enterprises are expected to invest an average of $1.5M in cloud-based services during the 2013 – 2014 timeframe.  IDG projects that large companies will spend $2.8M relative to small and medium-sized businesses investing $486K on average.
  • Chief Financial Officers (CFOs) (35%) are the hardest to convince regarding the value of cloud computing, followed by the board of directors or equivalent (24%), the CEO (24%), and the Chief Operating Officer (COO) (16%) third. Chief Marketing Officers (CMO) are the easiest to convince, with just 6% of respondents mentioning this group of executives being a challenge to convince regarding the value of cloud computing.
  • The percentage of organizational IT budgets allocated to SaaS increased from 8% in 2012 to 13% in 2013 according to the last two IDG Enterprise Cloud Computing surveys.  Infrastructure-as-a-Service (IaaS) increased to 10% of overall IT budgets, up from 7% in 2012.  In aggregate, 44% of IT budgets are spent on cloud computing today, increasing to 51% by 2015 in the base of enterprises interviewed for the study.
  • Enterprises continue to migrate applications to the cloud that increase collaboration and enhance customer relationships first.  Collaboration and conferencing solutions (38%), e-mail and messaging (35%) and Customer Relationship Management (CRM)/Sales Force Automation (SFA) (27%) are the top three applications being migrated to the cloud in the enterprises surveyed.  The following graphic shows which applications are moving to the cloud today and the plans for migrating applications in the next 12 months, and over the next 1 to 3 years.  This image is from Cloud Computing: Key Trends and Future Effects Report.

  • 59% of enterprises are still identifying which IT operations are the best candidates for cloud hosting.  33% have identified all IT operations that they are comfortable having hosted in the cloud, given the current security of cloud infrastructure and application design.
  • The three most important factors in selecting a SaaS application provider include the ability to configure and customize the cloud application to meet specific business needs (40%), consistent cloud application performance and availability (38%) and security certification and practices of the SaaS provider (34%).
  • 61% of enterprises have at least one application that is cloud-based in their organizations today.  This increased from 57% in 2012.  24% of enterprises are planning to implement cloud applications in the next 12 months and 15% are planning to between 1 to three years from now.
  • In enterprises with less than 1,000 employees, CEOs (52%) are the most influential role in cloud purchasing, followed by the CIO (39%) and IT/networking staff (33%).  In enterprises over 1,000 employees, the CIO (60%), followed by the IT/networking management (47%) and CTO or IT network architect (45%) are the three most influential roles in the cloud purchasing process.
  • 42% of cloud-based projects are eventually brought back in-house, with security concerns (65%), technical/oversight problems (64%), and the need for standardization (on one platform) (48%) being the top three reasons why.
  • The top three challenges to implementing a successful cloud strategy in enterprise vary significantly between IT and line-of-business (LOB).  For IT, concerns regarding security (66%), integration stability and reliability (47%) and ability of cloud computing solutions to meet enterprise/industry standards (35%) challenge adoption.    The following table compares the perceptions of IT and line-of-business leaders.  This image is from Cloud Computing: Key Trends and Future Effects Report.

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.

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  • 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.

10 Ways Cloud Computing Is Revolutionizing Manufacturing

manufacturing floorThe best manufacturers I’ve visited this year all share a common attribute: they are obsessed with making themselves as easy as possible to work with from a supply chain, distribution and services standpoint.  Many are evaluating cloud-based manufacturing applications including Enterprise Resource Planning (ERP) and several have adopted cloud-based applications across their companies.

With so much interest, there is much confusion as well.  I recently spoke with Cindy Jutras, founder and CEO of MintJutras.  Her firm has recently completed a survey of SaaS adoption in manufacturing, distribution and other industries.  She found the following:

  • 49% of respondents in the manufacturing & distribution industries do not understand the difference between single- and multi-tenant SaaS architectures.  Overall 66% of respondents to the survey did not know.
  • SaaS-based applications are 22% of all manufacturing and distribution software installed today, and will grow to 45% within ten years according to MintJutras.
  • The three most important characteristics of a SaaS solution in manufacturing and distribution include giving customers a measure of control over upgrades, consistent support for global operations and allowing for rapid and frequent upgrades.

Cindy Jutras Research May 8 2013

Why Manufacturers Are Looking To Cloud Computing  

Manufacturers are under constant pressure to increase accuracy, make process speed a competitive force, and capitalize on their internal intelligence and knowledge to make every supplier, distributor and service interaction count.  The manufacturers spoken and visited with to gain the following insights are in the high tech, industrial and aerospace and defense industries, where rapid product lifecycles and short time-to-market schedules are commonplace.

Cloud-based strategies give these companies the chance to bring their own innate intelligence and knowledge into every sales situation.  While on-premise systems could also do this, cloud-based systems were quicker to roll out, easier to customize and showed potential to increase adoption rates across resellers.

One manufacturing manager explained how during a new product launch the speed and volume of collaboration was so rapid on between suppliers and distributors that an allocation situation was averted.  That he said, made senior management believers.  These epiphanies are happening daily in manufacturing.

Based on my visits with manufacturers, here are the ten ways they are using cloud computing to revolutionize manufacturing:

  • Capturing and applying company-wide intelligence and knowledge through the use of analytics, business intelligence (BI), and rules engines.  For the many manufacturers who rely on build-to-order, configure-to-order and engineer-to-order strategies as a core part of their business models, using cloud-based platforms to capture knowledge and manage rules is accelerating. A key part of this area is mobility support for analytics, BI and rules engine reporting and analysis.
  • Piloting and then moving quickly to full launch of supplier portals and collaboration platforms, complete with quality management dashboards and workflows.  Among the manufacturers visited, those in high tech are the most advanced in this area, often implementing Vendor Managed Inventory (VMI) and demand management applications that deliver real-time order status and forecasts.
  • Designing in services is now becoming commonplace, making cloud integration expertise critical for manufacturers.  From simplistic services integration on iPhones to the full implementation of voice-activated controls including emergency assistance in the latest luxury cars, adding in services integrated to the cloud is redefining the competitive landscape of industries today.  Revising a product or launching an new product generation with embedded services can mitigate price wars, which is why many manufacturers are pursing this strategy today.
  •  Accelerating new product development and introduction (NPDI) strategies to attain time-to-market objectives. Using cloud-based platforms in high tech manufacturing is growing today as time-to-market constraints are requiring greater collaboration earlier in design cycles.
  • Managing indirect and direct channel sales from a single cloud platform tracking sales results against quota at the individual, group and divisional level is now commonplace across all manufacturers visited.  Dashboards report back the status by each rep and for sales managers, the profitability of each deal.
  • Using cloud-based marketing automation applications to plan, execute and most important, track results of every campaign.  Marketing is under a microscope in many manufacturers today, as marketing automation applications have promised to deliver exceptional results and many manufacturers are still struggling to align their internal content, strategies and ability to execute with the potential these systems promise.
  • Automating customer service, support and common order status inquiries online, integrating these systems to distributed order management, pricing, and content management platforms.  Manufacturing industries are at varying levels of adoption when it comes to automating self-service.  The cost and time advantages in high tech are the highest levels of adoption I’ve seen in visiting manufacturers however.
  • Increasing reliance on two-tier ERP strategies to gain greater efficiencies in material planning, supplier management and reduce logistics costs.  Manufacturers are also using this strategy to gain greater independence from a single ERP vendor dominating their entire operations.  Several manufacturers remarked that their large, monolithic ERP systems could not, without intensive programming and customization, scale down to the smaller operational needs in distributed geographic regions.  Cloud-based ERP systems are getting the attention of manufacturers pursuing two-tier ERP strategies.  AcumaticaCincomMicrosoftNetSuite and Plex Systems are leaders in this area of ERP systems.
  • Reliance on cloud-based Human Resource Management (HRM) systems to unify all manufacturing locations globally.  This often includes combining  multisite talent management, recruiting, payroll and time tracking.  Contract manufacturer Flextronics uses Workday to optimize workforce allocations across their global manufacturing centers for example.

Bottom Line:  Using cloud-based systems to streamline key areas of their business, manufacturers are freeing up more time to invest in new products and selling more.

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.

Microsoft’s Cloud Computing Strategy and Roadmap Evident at Convergence 2013

cloud-multi-tenancyKirill Tatarinov’s keynote this morning at Microsoft’s Convergence 2013 marks a subtle, yet very significant shift in how this technology leader is marketing itself to partners and the outside world.  They are humanizing their marketing, messaging and products.

Gone is the Spock-like precision of presentations packed with roadmaps, mind-numbing metrics and intricate feature analysis.  The Nick Brophy Band made the keynote complete by delivering excellent sets.

Microsoft is learning that telling a good story trumps terabytes of metrics. They delivered a strong keynote today starting out showing how attendees reached out to the local community and helped Habitat for Humanity.  Kirill then based the majority of his keynote on four customer success stories taken from the Microsoft Customer Excellence Award winners. Chobani, Shock Doctor, Revlon and Weight Watchers shared how they were able to better connect with customers and run more efficient businesses using Microsoft Dynamics.

The only aspect of these award winner’s stories that fell short was how the complexity of back office system integration was glossed over.  No mention of third party or legacy system integration was made, which could have shown how far Microsoft and its partners have progressed on this point, especially with the help of integration partners like Scribe Software.

Microsoft’s Cloud-First Strategy Playing Well With Partners

For Microsoft to succeed with Windows Dynamics and Azure, they are going to need each partner and reseller to believe in the vision of a cloud-first strategy, then translate their unique expertise into sales.  That’s going to be a challenge that Microsoft will have to deal with daily as it looks to further strengthen its partner and reseller base.  The recent Azure outage caused by an expired SSL certificate is on the minds of many partners and resellers here too.  Microsoft is promoting their Windows Azure Service Dashboard heavily here as a result.

Despite that recent outage, Microsoft’s ecosystem on Dynamics is flourishing , as is evidenced by the attendance and participation in this show.  The cloud-first strategy has infused a sense of hope and anticipation in many partners and resellers.  Walking the floor yesterday and today, nearly eight of every ten partners offered up how they are planning on the cloud without being asked about it.

Microsoft 2013 Roadmap Embracing the Cloud, Devices and Services    

Kirill Tatarinov’s keynote underscored how committed Microsoft is to becoming as cloud, devices and services company.  He cited the statistic that there are more devices connected to the Internet today than there are human beings on the planet.

Through several examples he also showed how Microsoft is moving full speed into being a devices and services business.  Microsoft Windows Azure is the foundational component to this strategy.  While Kirill did not specifically say that, it is clear from an architectural standpoint Windows Azure will be the foundational element of their devices and services strategy.  Microsoft is already competing with market leader Amazon Web Services, Google, Rackspace and many others.  For more information on the competitive landscape of this market, please see my previous post, Demystifying Cloud Vendors.

From a roadmap perspective this will also force Microsoft to support many more mobile operating systems and environments than they ever have before.  For their device and services strategy to succeed for example, they will have to support Google Android and Apple iOS device interfaces capable of integrating with SQL Server, at a minimum.

The following table showing recently announced updates to the 2013 Microsoft Product Roadmap first appeared on the Redmond Channel Partner website on march 18th.

Microsoft roadmap analysis

Source: Redmond Channel Partner Magazine  

Microsoft reports that Office365 will go to an accelerated release cycle, further capitalizing on the nature of a cloud-based architecture.  Resellers at this conference like the  Office 365 Open licensing program because it allows them to direct-bill customers for use of the suite, in addition to paying for the bundle of their services. Windows Azure-hosted versions of Dynamics NAV and Dynamics GP will arrive in mid-2013 according to the article as well.

For the cloud, device and services strategy to succeed Microsoft must also succeed in convincing enterprise accounts to migrate their applications to Windows Azure.  This is one of the most critical areas for the future of their cloud strategy in the enterprise, so expect to see customer stories and ongoing messaging on this point.

Bottom line: Microsoft is transitioning to a more humanized approach to marketing while embracing a cloud, device and services strategy. It will be the partner ecosystem that transforms that vision into a profitable reality.

Intacct’s CEO Robert Reid On Growing A Successful Cloud Business

Robert-Reid CEO IntacctSelling software to accountants, auditors and Chief Financial Officers (CFOs) takes accuracy, precision and software quality to an entirely new dimension.

Having worked at a start-up selling hosted accounting and finance applications to small and medium businesses, I’ve seen first-hand how demanding these professionals can be.  And rightly so, the system of record they manage keeps their businesses financially strong and growing.  Intacct is one of the companies I’ve tracked for the last few years in this area, and I recently had a chance to speak with their CEO, Robert Reid.

While there are many cloud financial management and accounting companies creating interesting products and winning customers, Intacct is unique.   Rob has infused a passion for customer centricity into the company along with a mindset of continual innovation in their applications’ user experience.  Rob is a longtime veteran of the enterprise software industry, having served previously as CEO of LucidEra and previous to that, group vice president of Siebel CRM On Demand for Oracle Corporation managing the SMB sector.  He also served as president and CEO of on-demand CRM innovator UpShot, where Rob grew the company tenfold before it was acquired by Siebel.  He is also one of the executive founders of Documentum.  You can find his LinkedIn profile here.

I recently had a chance to speak with Rob regarding his perspective on cloud computing in general and regarding Intacct’s business specifically.  Here’s a transcript to my interview with him:

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

Our biggest challenge by far is finding great people.  People who are curious,  people who want to learn and continually grow while also being customer-centric.  We’re looking for great people with these attributes and those who want to do rewarding, challenging work.  That’s a high priority for us today.

Second, we’re looking to add more partners who have expertise in accounting and finance to grow along with us and help customers anticipate what they need to do today and in to the future to deliver value to their organizations .

Third, anticipating the growth of the business and being able to effectively plan for the pace and direction of change is critical to us.

SaaS-based applications have proved themselves very well in small and medium businesses.  How and why are small businesses adopting SaaS-based accounting and finance systems today?  How is this going to change in the future?

We’re seeing usability and excellent customer experience designed into cloud applications being essential for the growth of our business.  In fact we’ve done intensive studies of how our customers can save time and be more productive with greater usability improvements, quickly released into our applications.

Intuitive design of application workflows, in accounting and finance, is another key success factors we’re seeing today.  This is leading to a consumerization of financial management systems.

Accounting and financial professionals are after greater visibility into their financials.  Analytics and modeling from an accounting perspective is also a high priority for our customers today.  The 21rst century CFO needs to have these analytics and modeling tools with real-time data to do their jobs, and we’re very focused on delivering them.

A critical success factor for any SaaS-based accounting system is the ability to integrate with 3rd party systems and also migrate legacy data.  Can you speak to this aspect of your company’s product and service strategy, and what your plans are in this area going forward?

Our architecture includes Open Application Programmer Interfaces (APIs) that simplify the complexity of integrating with homegrown, legacy and 3rd party databases and systems.  Over the last decade we’ve fine-tuned these APIs, publishing them free for our customers.  We’ve learned much from listening to our customers, continually fine-tuning APIs to stay in step with their needs.  Our APIs are making it possible for our systems to have inbound and outbound data from systems throughout our customers’ businesses creating a reliable system of record.

With SaaS it’s possible to accelerate the release cycles to any pace a company chooses.  Right now Intacct is committing to four major releases a year.  Are there plans to accelerate the release cycle and do more?

We’re staying with four major releases a year out of respect for the change management aspects of our customers.  Doing releases more often than that would force our customers to continually be educating their accounting, finance, reporting and services teams of new features.  We do make tens of smaller releases a year to incrementally add features customers ask for.  And our customers can choose to enable these features as they are added to our applications.  We are finding that balance between agile development and quality assurance of configurable features, while striving to make usability and the user experience  paramount.

Much has been said regarding single tenancy and multi-tenancy. Can Intacct customers choose between these options?  Is there a price premium for choosing one over another?

We are exclusively multi-tenant as it makes the most sense for our customers economically.  If a customer chooses a single-tenancy solution it takes a ton of time from an operations team to run it; so it ends up being a bad economic model for the company.  Since the hardware, and resources aren’t being shared, a single tenant system ends up being the most expensive way to go. There is a tremendous amount of cloud washing going on out there, where software companies and providers are trying to put a glow on old technology by calling it single tenancy, when it is really just a hosted version of that old application. It is important to choose a cloud system that was built from day one to be in the cloud and deliver tremendous value.

Do you partner with a cloud provider or own your own hosting center?  Are your long-term plans to own your own data centers? 

Our global hosting partner is Savvis.  We manage the servers and have complete control over our Service Level Agreement (SLA) monitoring and reporting.  We’ve also provided every customer with 24/7 transparency into our applications’ stability and reliability.

What percentage of your sales are from North America relative to Europe and Asia?  How do you see this changing in the next three years? 

The majority of our customers are located in the United States, but have on average five locations around the world..  Our multicurrency, multientitiy, and consolidated roll-up features are heavily used by this group of multinational customers.

Intacct has done well selling to accountants and financial professionals, a community known for valuing accuracy, auditability and precision.  How has Intacct been able to both evangelize cloud computing and cloud-based accounting systems to this pragmatic, at times skeptical market segment?  

We’re selling to the 21rst century CFO really well, stressing the need to have real-time visibility into operations and the ability to define metrics and modeling of current and future financial performance of their business.  As we’re selling them more than a system of record, but a system of engagement.  Our approach is to show how they can accelerate their growth as a business with better insights for all of the knowledge workers into their overall performance.

In 2009 the American Institute of Certified Public Accountants (AICPA), and its subsidiary, CPA2Biz, chose Intacct as the only preferred provider of financial applications to CPA professionals and AIPCA members.  Intacct was given an exclusive five year agreement that was extended for another three taking the agreement to at least 2017.  In addition, the International Federation of Accountants (IFAC) has chosen Intacct as their internal accounting and financial management application as well.  Much has been said about the role of trust in enterprise software in general and cloud-based applications specifically.  The AICPA and IFAC have given us the chance to be the trusted solution to customers as a result.

You’ve often said that Intacct is very focused on getting customers back their time.  How are you designing in greater usability and performance improvements to Intacct’s applications to make this happen?

We have a feature called dimensions, which gives our customers the flexibility to create and track the metrics that are specific to their business.  One of the most compelling cases of the value of dimensions is the example of a airplane leasing company that was able to grow their business 30% faster each year based on the increased insights gained.   Using our dimensions capability, the plane leasing company was able to track plane leasing data, track how many times a given plane had been leased, compare costs of other planes and also track the lifetime value of the planes as well.  One of the most fascinating aspects of this analysis is the finding that over time planes initial values drop and then increases  in value, just like a Ferrari.  Using dimensions gave the company the ability to analyze their data in new ways and, in turn, manage their assets more effectively and profitably than ever before.

The Intacct Accountants Program is one of the more unique in the industry.  Can you discuss how your company was successful in recruiting partners, and what your plans are for 2013 and beyond with this program?

This is one the top three strategic initiatives we continue to invest heavily in.  We’ve been able to build a successful program by concentrating on partners with strong accounting domain expertise, excellent command of billing and profitability analysis, and a broad base of accounting and finance expertise.  Our alliance with the AICPA has also helped in making our Accountants Program a success.

Do you use personas as part of your product development, product management and marketing strategies?  Can you comment on them briefly and how they are impacting your approach to product development and marketing?

We use personas extensively throughout our development, marketing and selling strategies.  Our personas include titles and roles, as well as problems and needs.  We also have a Follow Me To Work Program which is invaluable in fine-tuning the usability of our applications.  Intuit pioneered many of the advances in Follow Me Home research programs to fully understand customers’ needs.  We have much of the original Intuit QuickBooks product management and engineering teams working for us today, focusing on how to continually improve usability and our customers’ experiences with our software.

Where The Highest Paying Cloud Computing Jobs Are

jobs-are-in-cloud-computing-200x300Using analytics to better understand the cloud computing job market is fascinating.

One of the most advanced companies in this area is Wanted Analytics, who aggregates job postings from over 500 job boards and maintains a database of over 600 million unique job listings.  They specialize in business intelligence for the talent marketplace, providing insights into how one company’s salary range compares to competitors for the same position, also calculating the difficulty to hire a given type of candidate.  They’ve developed a unique Hiring Scale to accomplish this.

I recently had a chance to test-drive their analytics applications.  Using the parameters to analyze all cloud computing jobs that pay $100,000 a year or more for the analysis, I ran several queries.  Key takeaways include the following:

  •  San Jose-Sunnyvale-Santa Clara, CA leads the MSAs with a salary range $118K to $144K and one of the highest Hiring Score index values of 81, meaning it is very difficult for employers to find candidates who are qualified for their open positions. Bridgeport-Stamford-Norwalk, CT is next with a salary range of $117K to $143K and a Hiring Index Score of 75.  The SMA for San Francisco-Oakland-Fremont, CA shows a salary range of $114K to $140K and a relative high Hiring Scale of 88.  Salary range for cloud computing professionals charted by metropolitan  statistical area (MSA) is shown below:

  •  Professional, Scientific and Technical Services (31%), Information Technologies (30%) and Manufacturing (12%) lead the top ten industries hiring cloud computing professionals in positions paying $100K or more. Wanted Analytics uses the NAICS taxonomy to organize this area of their database.

  • A total of 5,299 positions are open today for Computer Software Engineers, Applications and Architects as is shown in the following graphic.  What is surprising is the rapid increase in Marketing Managers (1,076 positions),  Sales Representatives, Wholesale and Manufacturing, Technical and Scientific Products (576 positions) and Sales Engineers (452 positions).   Wanted Analytics uses the Standard Occupational Classification (SOC) taxonomy too organize this area of their database.  The results are shown in the graphic below:

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

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