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Accounting Systems In The Cloud

According to analyst firm Forrester Research, cloud computing is projected to be a $160 billion market by 2011. However, breaking down that macro figure into more isolated markets is a bit of a difficult task. In my most recent quest for an on-demand accounting and CRM software system I've discovered that just determining which business software suppliers operate in the cloud and which do not can be an unnecessarily lengthy task.

I initially reached out to the mainstream ERP software suppliers such as SAP, Lawson, Sage and Microsoft. With each vendor I was clear that due to our decentralized nature and desire to outsource the accounting software and CRM application we clearly desired software as a service (SaaS) systems. Each vendor acknowledged my request, suggested that they could accommodate my desire and then proceeded to sell me on on-premise systems. I found the entire experience insulting and a significant waste of time.

accounting software

I then proceeded to focus my software selection on more legitimate SaaS accounting and front office suppliers. Fortunately, I knew of NetSuite, Aplicor and BizAutomation. I would have liked to uncover a few more candidates to increase the surveyed population and competition, however, I was not able to find any more legitimate on-demand accounting software vendors. I did consider Salesforce.com with one of their AppExchange partners, however, it became clear very quickly that the AppExchange programs were a bit superficial, the integrations between the programs quite weak and the opportunity for vendor finger pointing very high. I also suspect the differences in the UIs (user interfaces) between Salesforce.com and the third party programs would extend the learning curves for our users. Lastly, I must admit I was not excited to negotiate two vendor contracts for what I feel is one enterprise business system.

While NetSuite, Aplicor and BizAutomation all offer impressive online accounting systems, the vendors could not be more different. NetSuite is a Silicon Valley SaaS player born from the seeds of Oracle. Every call from NetSuite was a 'sell first, ask questions later' approach which got pretty old. Aplicor was just the opposite and BizAutomation was somewhere in the middle.

From the software demonstrations we narrowed down the finalist list to NetSuite and Aplicor. Primarily due to some advanced accounting feature sets we ultimately selected Aplicor. The accounting and sales people on the project team were heavily biased toward Aplicor's ease of use and our CFO favored the reporting in Aplicor. We were a bit troubled by the excessive rants and flames directed at NetSuite by former NetSuite users and business partners and published on a number of social media sites, however, since Aplicor's product was superior for our needs we didn't need to review those comments and allegations further. I personally liked Aplicor's technology and web services integration approach better, however, these factors played almost no role in the final decision process.

We're now into the accounting software implementation pilot and all looks good so far. I'll likely publish another post some time after the go-live and hopefully share some accounting software implementation lessons learned.

June 20, 2008 at 10:50 PM in SaaS ERP | Permalink | Comments (0) | TrackBack (0)

Storage In The Cloud

I've recently evolved from a believer to a practitioner of cloud storage. Based on my organization's data growth, complexity and increased need for uninterrupted delivery (5 9's assurance), I reviewed cloud storage solutions from Amazon, Nirvanix and Rackspace's Mosso. It's worth noting that several other big name players are entering the storage as a service market, however, are extremely new or more likely do not yet have commercially available cloud based storage solutions. Google is preparing a launch for its storage in the cloud solution currently code named GDrive. EMC is rearchitecting some its newly acquired storage solutions for enterprise cloud storage solutions code named Hulk and Maui. IBM is advancing several storage in the cloud solutions under the code name Blue Cloud Umbrella.

With a plethora of vendors creating their own storage buzzwords and lining up for a giant green field opportunity, it's important to recognize that cloud storage does not refer to any type of Web accessible storage. According to Gartner analyst Stan Zaffos, Enterprises should first think of cloud computing as massively scalable IT capabilities delivered to external customers using Internet technologies, and then think of cloud storage as that which supports cloud computing applications.

While I was really impressed with the Mosso virtualization management and offering, Mosso's data storage resides only in Rackspace's Dallas data center, although the company is in the process of replicating customer data to their UK data center location. Pricing was comparable among the cloud storage solutions. Nirvanix charges 18 cents per gigabyte of storage per month as well as 18 cents per gigabyte uploaded and downloaded. Amazon charges 15 cents per gigabyte of storage per month plus 10 cents to 18 cents per gigabyte of data transfer. At the end of my cloud storage as a service evaluation, Amazon's Simple Storage Service (S3) delivered the best total cost of ownership (TCO) for our particular storage environment.

While Amazon spews information about its S3 applications and architecture, the company is silent with regard to delivery infrastructure. Competitor Nirvanix claims that Amazon's delivery network is made of several custom software applications built on top of file system technologies running on Intel-based storage servers located across six data center locations on the US East Coast, US West Coast, Europe and Asia. By the of 2008, Amazon internally suggests they will grow to more than 20 global data center locations. Amazon seems to replicate customer data in either two or three locations. Amazon, or any other vendor, isn't without uptime risk. It was only last February that Amazon's S3 service suffered a multiple hour outage that Amazon attributed to an increase in authentication requests (I suspect a widely distributed DDOS attack, however, Amazon doesn't confirm that). Nonetheless, despite the downtime, no data was lost or compromised, Amazon has implemented additional safeguards and no downtime has since been incurred. I've been with service for just over 60 days now. The implementation, maintenance and management have been without surprises and I'm clearly sold on both the cloud storage concept and Amazon's S3 service.

May 24, 2008 at 11:10 PM in SaaS Storage | Permalink | Comments (0) | TrackBack (0)

SaaS Myths Debunked

I'm using this post to comment on the most popular Software as a Service (SaaS) myths which seem to circulating the Web in what I believe is a feverish pitch and last ditch effort by non-SaaS software companies trying to inject FUD (fear, uncertainty and doubt) to slow the most impressive industry movement and technology disruption we have witnessed in at least the last 20 years.

Here are the myths and here are the truths... More ...

April 25, 2008 at 10:30 PM in SaaS | Permalink | Comments (0) | TrackBack (0)

Dell as a Service (DaaS) - yea right :)

Despite a customer support and service reputation that is nothing less than embarrassing, Dell intends to evolve its December 2007 acquisition of Everdream and that company's Uptime Services Suite remote management products as well as the company's July 2007 acquisition of Silverback Technologies into a remote service offering. Everdream's software brings remote management capabilities such as patch management, anti-virus updates, online backup and data encryption while SilverBack's solution was primarily focused on infrastructure monitoring and management.

Steve Schuckenbrock, President and CIO of Dell's Global Services, predicted a remote information technology management service sold to small and midsize businesses (SMB) which will identify and remedy issues and problems with users' systems before they escalate or impair the users' experience. Dell is piloting the remote management service with about a dozen companies and plans to commercially release the managed service in the America's during the summer and in Europe and Asia before calendar year end. According to Schuckenbrock, Dell wants to capitalize on its expertise in configurability and supply chain distribution and bring to the supply chain of services the know how that Michael Dell brought to the supply chain of hardware over twenty years ago.

While I believe the outsourcing of IT maintenance, management and evolution is a valuable service that many small and midsize businesses would enjoy offloading for a reasonable fee, I question whether Dell or any other non-consumer friendly hardware vendor can be successful in this high-touch, customer relationship driven market. Terms such as DellHell remain highly relevant in the PC user psyche and the prior move of the company's customer support to India was utter frustration for Dell's customers and a complete debacle for Dell. Perhaps in a similar industry cost cutting mode, HP and IBM have moved much of their customer support and help desk centers to India and are experiencing similar customer frustrations. For a recent point of reference, I recently tried to purchase an AC adapter for my HP laptop. Unfortunately, they sent the wrong unit. No big deal I thought, until I attempted to speak to an offshore customer service representative to exchange the unit for the right part. No joy. After over one hour of speaking with two individuals who incurred significant difficulty with the English language, I finally gave up on the exchange; and have since given up on HP. While HP and the other hardware companies can churn consumer accounts and get away with it, this type of behavior cannot withstand the expectations of the SMB market and prove to be a viable business operation.

While not confirmed, it appears Dell will approach the remote management as a service with the use of its direct sales force as well as through channel partners, value added resellers (VARs) and managed service providers.

March 24, 2008 at 11:50 PM in SaaS | Permalink | Comments (0) | TrackBack (0)

Storage as a Service (SaaS)

With its recently introduced MozyEnterprise solution, EMC has become the decisive and leading storage as a service vendor. EMC's storage as a service follows its earlier entry of information security as a service via the RSA Key Manager as a Service productized solution. The backup and recovery service stems from the Berkeley Data Systems acquisition and has been expanded from a consumer level product to an enterprise product targeted at organizations with hundreds or thousands of PCs and servers.

Businesses of all sizes are evaluating offline storage and backup services as a method to ease system administration and reduce security concerns associated with physical backup mediums. Gartner analyst Adam Couture said that the technology is slowly becoming more attractive to larger companies, thanks to advancements by EMC and storage and backup rivals such as IBM, Symantec, Seagate Technology and Iron Mountain. Analyst firm IDC more quantitatively projects that sales for hosted backup storage services will grow from $235 million in 2007 to $715 million in 2011.

As with most software as a service solutions, MozyEnterprise is a subscription-based, multi-tenant solution which performs online backups of Windows-based desktops, laptops and servers. EMC has created a centralized SaaS web platform called Fortress which delivers centralized system administration, metering and billing. The company has also produced a way to shrink the amount of data sent over the Web, and thereby lessen the necessary bandwidth, by using a deduplication technology and related methods.

The MozyEnterprise solution is priced at about $5.25 per month plus $.70 per gigabyte of storage for each laptop and PC or $9.25 per month plus $2.35 per gigabyte per month for each server. EMC claims to have 1,200 trained value added resellers (VARs) (most of whom were previously offering the prior Berkeley Data Systems consumer product) whom are geographically dispersed and actively promoting and reselling the new product. While several start-up technology vendors have previously introduced similar web-based backup, storage and recovery solutions, EMC is the first major player to throw its hat into the ring and is certain to add both credibility and substance to a service market looking for affirmation.

February 6, 2008 at 10:50 AM in SaaS | Permalink | Comments (0) | TrackBack (0)

Security as a Service (SaaS)

Or maybe the acronym should stand for Storage as a Service (SaaS). Either way, Symantec is getting into the SaaS market in a big way this year. After nearly two years of false starts, disappointing earnings and a mismanaged Enterprise Resource Planning (ERP) system implementation that ended in a debacle (and infuriated customers and partners as the new ERP system collapsed the company's online ordering applications) in November 2006, Symantec intends to make up for lost ground with the Symantec Protection Network (SPN).

SPN represents a new revenue channel for value added resellers (VARs) to resell online storage and information security via a subscription. The program began a Beta period last April and will be officially kicked-off this calendar quarter. Some of the more traditional hosting pundits point out that Symantec's service is really more of a traditional (storage and security) managed service and not application software specific; and suggest that Symantec and others may be trying to spin managed services into the SaaS moniker in order to take advantage of the industry buzz and wall street valuations given to SaaS companies. However, Symantec's big move demonstrates the merging of multiple service delivery types which extend beyond software to benefit the customer with the SaaS value proposition and earn the provider an annuity revenue stream. In fact, take hosted CRM software giant Salesforce.com. This one time CRM software application provider has left behind its sales force automation (SFA) business systems heritage and moved to what it calls Platform as a Service (PaaS). The on-demand hosting company clearly is expanding the SaaS model and has its sights set on becoming a SaaS operating system and competing with Microsoft more so than CRM software publishers such as NetSuite or Aplicor.

Online storage and security are a synergistic duo ripe for subscription services to small and midsize businesses. If Symantec can get its act together and deliver a quality SPN program with broad business partner support, it has the corporate mass and global reseller and distribution channels to bring this subscription service to market and reap the benefits of the annuity service model. More so, a sustained success with online security and storage will accelerate the perception, reach and definition of Software as a Service beyond just business application software programs.

January 2, 2008 at 11:12 AM in SaaS | Permalink | Comments (0) | TrackBack (0)

Intuit on the SaaS March

At Intuit's Investors Day last September the company announced that it spent approximately $18 million for the year ended July 31 and plans to spend an additional $140 million during the current fiscal year for a new tier four data center still under construction in Washington state. CEO Brad Smith told investors and attendees at a conference this month that the new data center facility is intended to deliver all the hosting for the company's upcoming software-as-a-service (SaaS) operations. While Smith and the company wouldn't get into specifics, quite possibly as that would involve M&A activities, the amount of the investment and the desire to broach this unscheduled topic ahead of other planned conversations suggests that Intuit is seriously gearing up for saas business solutions; most likely either customer relationship management software, complete enterprise resource planning (ERP) solutions or more limited hosted accounting software solutions. Most bets seem to favor a natural evolution of the QuickBooks solution to the subscription-based and on-demand hosting model.

December 20, 2007 at 10:10 AM in SaaS ERP | Permalink | Comments (0) | TrackBack (0)

Mashups in the Enterprise

The Google OpenSocial announcement and value proposition parallels, or at least suggests quite a bit of overlap, with the over-hyped concept of mash-ups. Don't get me wrong, the mash-ups concept is great and in the consumer utility computing model shows both great promise and demonstrated success. The ability to overlay your company address with Google maps and Mapquest directions on your company's corporate web site "Contact" page is a classic example. However, while the consumer mash-ups user experience flourishes, mash-ups in the enterprise are little more than a pipe dream.

The most publicized and cited enterprise mash-ups directory is the Salesforce.com AppExchange. At first glance, the directory is extremely broad. Unfortunately, additional glances get no further than 'extremely broad'. I had the opportunity to deal with an AppExchange mash up from an accounting software manufacturer that claimed integration from Salesforce.com to the accounting system Order Entry and Accounts Receivable modules. To cut to the chase, the mash-up was complete marketing hype. The integration was nothing more than an extremely basic (and unreliable) data exchange which usually moved a transaction document between the CRM and ERP system, however, failed to provide several basic aspects of referential integrity, security enforcement, error handling and downstream data management for user queries and reports. After jumping through hoops and incurring way too much in consulting fees, we finally abandoned the alleged integration.

The reality is that merging and integrating multiple-vendor best of breed business software systems has been a difficult and problematic exercise since the beginning of packaged business software systems over 30 years ago. While I do think some mash-ups will get past the marketing-only hype and provide true Enterprise 2.0 value, I suspect they will be few and far between and enterprise mash-ups will pale in comparison to the pervasive adoption and success of consumer based mash-ups.

November 17, 2007 at 11:06 AM in SaaS CRM | Permalink | Comments (0) | TrackBack (0)

Google's Getting Social

On November 1, Google released "OpenSocial", a suite of three APIs (Application Program Interfaces) designed to integrate the user profiles, member networks and custom widgets across social networks. This is a logical and much needed next step designed to merge the Web 2.0 experience and content among complimentary but otherwise mutually exclusive social networks. There's little doubt that Google's intent is to counter Facebook's successful developer platform which was released last May 24 and has already spawned more than 7,000 custom widget applications. There's also not much debate that Google considers Facebook a direct competitor particularly now that Facebook and Microsoft are cozy.

Irrespective of motivation, let me reference my own social networking experience as a case in point. I have a LinkedIn profile with a small but active network. I chose LinkedIn as it has a reputation as the social network for 'business'. I didn't choose Facebook as its primary audience is college students (a crowd younger than mine) or MySpace (as this is my kids crowd). Frankly, I don't know that I have time to participate in more than one social network, and even if I do, I feel a bit shallow creating profiles in every online community. However, my participation would increase if I could link my content and my network membership across multiple social networks. Let me communicate with members of other social networks without having to join those networks and replicate my profile multiple times over. Will OpenSocial provide me this universal community expansion? I don't know but the concept really sounds appealing and Google is betting it will permit programmers to reach the 400 million users of social networks.

Taking the concept a step further, OpenSocial speaks to cross social network development standards. Unlike Facebook, Google is taking a non-proprietary and non-vendor specific technology approach. OpenSocial has been released as three APIs which offer access to social network user profiles and their network of friends. I'm unclear whether Google has taken a lowest common denominator approach or created a more empowering technology. Nonetheless, if gadgets or widgets which today are social network dependent (e.g. a widget developed for Facebook only runs on Facebook) can extend across social networks then of course there value, impact and reach also extends. While today's widgets are admittedly trivial for the most part, their expansion to business settings, Enterprise 2.0 and integration with business software applications (such as CRM and ERP systems) is a foregone conclusion which will further escalate their adoption to a widespread utilization.

The OpenSocial momentum has begun. Several social networks including Friendster, LinkedIn, Hi5, iLike, Ning and Google's own Orkut social site have signed up for OpenSocial. Some skeptics point to Google's prior multiple vendor middle ground GoogleTalk solution. GoogleTalk was a great concept of using open standards to create a universal Instant Messenger that would link all other vendor instant messengers so you weren't forced to create an IM account with multiple vendors in order to communicate with your friends who use multiple vendor solutions. GoogleTalk hasn't taken flight and its adoption is very low at best.

November 02, 2007 at 09:50 AM in Social Media & Web 2.0 | Permalink | Comments (0) | TrackBack (0)

HP Goes SaaS

With the acquisition of Mercury HP has solidified a powerful vision for Software as a Service IT management. HP's Research Laboratories are planning the SaaS development and deployment for IT maintenance, management and evolution with a longer term aspiration for a play in the service aggregation market.

First things first, HP will carve out its slice of the SaaS space using its recently acquired Mercury software program to delivery IT infrastructure and service delivery management. Primary service offerings include IT project management, change management, portfolio management, testing services and production monitoring/management.

According to HP Vice President-SaaS, Marc Olesen, key benefits from the SaaS offering include an accelerated time to value for new systems and the choice to relieve IT resources by moving responsibility for the management and performance to the service supplier. HP offers flexibility to permit client organizations' to mix and match the services they wish to utilize. SaaS solutions are also structured in a complementary way alongside the traditional licence and procurement approach. According to Olesen, several client companies are mixing SaaS and on-premise services based on their resourcing and depending on where they are on their system lifecycle.

The SaaS offering will be expanded to include a Service Desk. HP is also looking at SOA Governance using tools it acquired with Systinet, security tools acquired from Spy Dynamics and data center automation from the OpsWare acquisition.

HP's early prospecting has clearly been to its existing customer base, however, recent client acquisitions have shown increased participation from new HP customers and in particular, customers historically using service management systems from competitor IBM and its Tivoli product. There are currently over 700 SaaS customers and the business forecast calls for 30 percent annual growth.

July 10, 2007 at 08:38 AM in Software as a Service | Permalink | Comments (0) | TrackBack (0)

Microsoft Seeds The SaaS Development Community

Microsoft's SaaS seeding of their ISV and partner community seems to be showing some signs of progress as measured by new product announcements. About a year ago, Microsoft introduced the service provider license agreement, expanded MSDN subscriptions, created a hosting software core competency and provided a number of well done technical guidance documents which all promoted SaaS software development (of course using Microsoft tools and technologies). The Microsoft Emerging Business Team want a step further in seeking out venture funded ISV (Independent Software Vendor) startups for additional financial investment along with software architectural guidance, advice and input. Perhaps the most coveted partner benefit was support from Microsoft's marketing machine once new products are ready for prime time.

Fred Chong and Gianpaolo Carraro are two smart Microsoft guys that work in the Architecture Strategy Group and provide great SaaS architectural advice. In fact, they are going much further and creating a portal of shared knowledge and best practices. Fred is creating the SaaS architecture guidance book on his blog and providing insight for highly relevant items such as tenant management, security, programmable software services, metering, configuration management and SaaS scalability. I recommend a review of this site for all SaaS ISVs leveraging Microsoft technologies.

February 21, 2007 at 10:30 AM in SaaS ERP | Permalink | Comments (0) | TrackBack (0)

SaaS and The Long Tail

For those not familiar, The Long Tail was originally a statistics phrase used to describe distribution patterns and typically represented with an XY based graph that resembled about half of a bell curve.

The Long Tail

However, in 2004 Wired magazine Editor Chris Anderson used the phrase to describe how e-tailers such as Amazon, Barnsandnoble.com or NetFlix could maximize their distribution power by promoting small volume hard to find items presumably at higher margins than easy to find, mass merchandised items. There's much more on this topic at Chris' blog.

SaaS offers an ideal platform for promoting The Long Tail as a business model. Vertical market, industry specific or specialized software applications, particularly business software applications, represent a fraction of the horizontal application software market primarily because the costs related to sales and distribution of far more narrow systems are less favorable than mass merchandising costs related to horizontal systems. For example, the largest application software manufacturers are SAP, Oracle, Sage, Microsoft and Infor. While these vendors have verticalized their horizontal programs to a degree, they are all clearly horizontal players who cater to every industry possible and make the majority of their company revenues from the same non-industry specific business software solutions.

SaaS business solutions know no boundary for customer acquisition or fulfillment. SaaS offers the opportunity to lower the cost of marketing, sale, distribution and support and thereby capitalize on the long tail of distribution fulfillment to an undeserved market place. The SaaS business model is huge. With many industries, and certainly with business software solutions, the long tail offers more market share potential that can be garnered if the distribution economies can be conquered. Further, once the customer acquisition costs are resolved, the margins and profit potential (sometimes called a profitability mine) are superior when compared to horizontal software products.

Today, industry SaaS solutions and the long tail for these industries are only potential markets. While I believe vertically focused SaaS solutions are inevitable, I also recognize they will largely only evolve after the horizontal solutions are more plentiful, stable and adopted.

January 30, 2007 at 12:48 PM in SaaS Strategy | Permalink | Comments (0) | TrackBack (0)