Monday, April 23, 2007

SaaScon recap

What a great weekend. Finally coming back to the home base to do a belated SaaScon recap. I'll admit this is just scratching the surface, but below are some tidbits:

  • Jim Steele, President of Salesforce, talked about’s IdeaExchange, which I had never heard of before and was really impressed by. IdeaExchange is Salesforce’s community driven product feedback and development site that leverages a Digg-like voting system. Users are able to post feedback on Salesforce products, and other users can then vote on that feedback to push it to the front of the queue. Salesforce launched the IdeaExchange website in October 2006.

  • SuccessFactors indicated that they will be figuring out a way to package and sell their customer’s metadata. I was definitely excited to hear this. Ironically, in a previous post “Future of SaaS: don’t forget the data!”, I commented on how interesting SuccessFactors’ metadata would be if it was readily available. Sounds like soon we’ll be able to take a look. (For more on this topic, check out David Anderson’s blog post, “The SaaS Goldmine in Supply Chain Software.” Turns out Taleo is already doing this.)

  • Probably the most thought provoking presentation of the day was by Jeffrey Nick, SVP and CTO of EMC. In his presentation, The Next Inflection Point for SaaS, he described his theory of a future world in which application architecture is transformed from tightly-coupled coding (the application with the data) to instead a loosely-coupled composition. Thanks to web services and SOA architecture, this will enable a world in which companies can more effectively achieve their Information Lifecycle Management (ILM) goals. If you’re interested in learning more, email me or comment on this post and I can send you his presentation.

  • A metric quoted a few times during the day: According to Gartner, by 2011, 25% of new business software purchases will be SaaS.

  • SaaS is often thought of as of something only sold to SMBs. However, on demand companies such as Workday plan to take advantage of legacy software maintenance renewals to go into mid-tier and Fortune 500 companies and bring their new solution, with a subscription fee that costs as much as the maintenance stream the company had been paying.

  • That SaaS leverages consumer internet concepts to produce innovative business web solutions was a theme that came up repeatedly. A few fun facts that you may already know:
    • Steve Lucas, VP On Demand Software and Services for Business Objects, admitted that his inspiration behind BO’s on demand initiative was Flickr
    • Marc Benioff of Salesforce has been very influenced by Consumer Internet.
      • Salesforce’s AppSpace moniker has MySpace to thank.
      • Apparently, Benioff wanted to call AppExchange “iExchange” (influence here is iTunes). Guess he lost that fight. But no wonder AppExchange’s web page has a huge banner proudly screaming Forbes’ quote describing AppExchange as “The iTunes of Business Software.”

Saturday, April 21, 2007

Abstinence Programs: No ROI

Going a little off topic this morning, err afternoon, but came across the shocking news (pdf) that abstinence education (Four Title V Section 510) resulted in --wait for it -- absolutely no change in sexual behavior by teens. The study was conducted by the Mathematica Policy Research Inc.. Slate reports it was a government initiated study. Here is the first paragraph of the "Impacts on Behavior" summary:

Findings indicate that youth in the program group were no more likely than control group youth to have abstained from sex and, among those who reported having had sex, they had similar numbers of sexual partners and had initiated sex at the same mean age. Contrary to concerns raised by some critics of the Title V, Section 510 abstinence funding, however, program group youth were no more likely to have engaged in unprotected sex than control group youth.
Let's hope this ridiculously transparent initiative doesn't get anymore federal funding. We deserve more separation between church and state.

Here, by the way, is a counter-article from a woman who helped design the abstinence curriculum for one program, if you want to see the other perspective on the study: "Don't Believe the Headlines" from

Thursday, April 19, 2007

Taking the Green PR Route

At the SaaSCon, I ended up sharing a coffee with a woman who worked in PR (alas - lost her business card). During the conversation, she mentioned that she was trying to find "Green" PR slants for the software companies she represents, i.e., pledging to go carbon neutral much like did, or emphasizing an environment-friendly aspect to the business.

I found this interesting because just the other day I received a nice email from Joe Steuter of JonesPR. In his email, he brought to my attention some stats LiveOffice has published on the environmental benefits of keeping electronic archives instead of making paper copies, and also a video LiveOffice posted on YouTube. I don't know for sure, but I'm going to take a wild guess that Joe is doing PR for LiveOffice.

It is getting pretty clear that the Green PR route is going to be a common occurrence. It will be interesting to see how this route plays out. Will there be more people leveraging a positive externality the company inherently has which helps the environment (as is the case for LiveOffice - I bet their growth driver is less concern for the environment and more concern for compliance) or is there going to be more examples of companies going out of their way to help the environment (Walmart or Salesforce)? [Of course, with the latter example you might argue that the intention is just to benefit from the good PR... but let's not be that cynical. ;) And even if it is true, the means justify the end in that case, I think.]

On the other hand, there is a real disconnect between just having the former without the latter. I don't think companies should espouse the environmental benefits of their products without walking the walk. Do you?

Here are LiveOffice's stats and video:

View (and link to) the LiveOffice Earth Day video:

Here are some stats you might find interesting:

  • The Radicati Group ( estimates that approximately 541 million workers worldwide rely on email communications to conduct business, and each worker sends and receives, on average, 133 messages per day.

  • According to calculations by LiveOffice, if each of these 541 million workers prints and stores as few as 5 emails per day – it would consume more than 6,000 trees a day. That adds up to more than 2 million trees every year.

  • According to LiveOffice, some companies use 20-foot shipping containers to store hard copy documents; each of these containers can hold 3.5 million printed emails stored in cardboard boxes. But that means more than 300 trees were used in printing all those emails.

  • According to the National Academy of Science, every year 20 million hectares of rainforest — an area the size of the states of New York, Connecticut, Massachusetts and New Jersey combined — are cut down, releasing millions of tons of carbon emissions into the atmosphere. At this rate, most of the world’s tropical forests will be lost by this century’s end, as will important species, natural resources, local livelihoods and the opportunity to slow climate change.

  • The good news is that tree conservation, through methods such as digital email archiving, can have a significant and positive impact on the environment as a whole. According to the Arbor Day Foundation, “over the course of 50 years, a single tree can generate $31,250 of oxygen, provide $62,000 worth of air pollution control, recycle $37,500 worth of water, and control $31,500 worth of soil erosion.”

Whoops! Feed hiccup.

Just noticed a few of my older posts got re-published to Venture Capital Feedburner because I added new tags to them. Please disregard.

Wednesday, April 18, 2007

What's Great for the Customer is Great for SaaS Adoption (AKA one neck to choke)

Just finished up a two day stay in Santa Clara for the SaaScon conference. Although there were definitely the standard mix of boring infomercial speeches by some of the event sponsors, overall I found the event to be very stimulating and I’ll blog a few of the highlight insights later. For now, I’ll mention one particular takeaway I had at the conference which I think will be important for SaaS adoption.

To take a step back, a theme that came up again and again during the conference is that, because of SaaS, all the complexity, risks and costs of software implementations, delivery and ongoing maintenance have been shifted away from the customer to the provider. This includes what we normally think of when we think of SaaS – the application architecture, etc., but also the delivery architecture. Combined, this includes everything from having an intuitive application logic to fast performance (improved by the likes of Akamai if necessary) to seamless updates. Whereas back in the day, it was the customer’s headache to deal with these things, SaaS makes it the ISV’s headache.

Steve Lucas, VP of On Demand Software and Services for Business Objects, explained it best when he recounted the sleepless nights he has had since launching “You take on ALL the pain of supporting your customers that your customers used to have to go through.” Stressful for the ISV but great for the customer!

From the company’s perspective, if you’re the person making the vendor selection decision, this is extremely important. And to explain why, I’ll take a tip from Kathy Sierra (whose discontinued blog I am still mourning) and hope that a picture explains everything I ever learned in management consulting:

What does this mean? What SaaS provides to the company, specifically to the IT staff of a customer, is the emotional increased peace of mind. The CRM system goes down? Call Salesforce. The recruiting system is not working? Call Taleo. Of course the business case for SaaS still must derive from the rational – i.e., cost, SLA's, etc.. But when you are the decision maker, and (I’ll caveat), have already had an implementation with a SaaS vendor that has saved you many sleepless nights, that emotional element of the decision making process I think will be too much to ignore. And I don't think that's a big caveat. Do you? Perhaps a more interesting question is -- how does the political factor in?

Monday, April 9, 2007

Outside the Valley

I've been asked to be a blogger for Outside the Valley. OtV was formed to highlight start ups outside Silicon Valley, and also to be a resource for entrepreneurs trying to navigate the non-Valley waters. Take a look!

My first post, "The Venture Process When You’re Outside the Valley (Part I)" is up. Here's the beginning:

Given that this blog is called Outside the Valley, it is worth chatting about the venture process when you’re, well, outside the valley. So let’s tackle it: If you’re not in the valley, what role does location play when a VC is evaluating your company as a potential investment?

First of all, it goes without saying that if you are signing up users or selling product faster than you can twitter a sales update (the “train leaving the station”), a General Partner won’t think twice before hopping onto a plane. Sure, the Skype team was based in Luxembourg. But what do you think we did when we saw Skype’s user numbers?

Geography becomes more of a factor the other 98% of the time: when you are less the train leaving the station and more the train still boarding passengers and luggage. And this all has to do with a VC’s favorite word: Risk.

You can think of this in terms of 3 stages:
1. Getting your foot in the door
2. Securing an investment
3. Ongoing support

Because this post will be too long if I tackle it all at once, I’ll address the first stage in this post, and the next two stages in the second post.