Recently in saas Category

Another point Nicholas Carr made was that IT and telecom are colliding. A new landscape is coming. 

My thoughts immediately went to GV. Who will be replaced by Google Voice?

• Who is the commodity?  
• Who will add Value to the User Experience?

People will pay for easy and reliable. (Not all of them will, but more than enough will. Remember that Cbeyond only has 50k customers and PAETEC just about 100K). 

Stop selling on price. If you aren't talking TCO or ROI, you are selling telecom, not apps. 

PBX and software companies have had to stop thinking in terms of product and start thinking in terms of Managed Services deployed over the Network. If they are thinking about it as SAAS, should all the Hosted PBX folks be looking at Voice as just another app delivered over the network? Voice is just an app!

I'm in Atlanta speaking at the Microcorp One-on-One event about Trends in 2010. The three trends that I see for agents are the following: Applications, Quality of Service (QOS), and Mobile Broadband (MBB). But they are kind of inter-dependent. Ubiquious broadband leads to innovative uses and applications. Applications like on smartphones lead to a greater need for mobile broadband networks.

Mobile Broadband is growing. Smartphones are replacing cellular handsets. Social networks are moving to mobile devices so people can Facebook and Tweet. RIM's Blackberry brought us mobile email, but it is a standard on many phones now. Netbooks and data cards are presenting the US cellular companies with some fits. They like the additional revenue, but have to keep dropping billions on the network backhaul and capacity upgrades. (And another $45B+ on the upgrade to LTE/4G).

All this means that there are new uses for the mobile broadband, like the Kindle. Sprint's Wispernet allows Amazon to instantly download books, magazines, newspapers and blogs to Kindle devices. Machine-to-machine devices can utilize the cellular data network to provide connectivity for ATM machines, security cameras, and a host of other devices that need to communicate with a NOC or remote server.

All of this is a cycle of applications driving network usage. Ubiquious broadband driving more apps. It's one reason that the FCC needs to maintain open network and Net Neutrality guidelines in place.

Applications - like email, databases, office suites, CRM - are creating a demand for managed services, such as an outsourced IT department. In addition, businesses are looking at the Cloud - moving applications to a data center for redundancy, security, and availability - as a way to save money and stop worrying about the IT department. With applications being delivered in the Cloud or by way of SAAS or even Virtualization, Agents have a chance to offer more than just Internet Access or WAN circuits, like private line. Agents can sell Layer 2 to Layer 7 - pipe to apps. It's a way to get deeper into accounts. It's a way to offer a complete solution. It's a way to deliver on the label of Trusted Advisor.

Applications are driving sales. Voice and email are just the primary apps. Business critical data is also driving mobile broadband. Ubiquious broadband is allowing for innovative ways of accessing data. The problem becomes reliable access to the data. That's where Quality of Service comes in. QOS on the WAN is what is needed to access data reliably and quickly. The MPLS trigger is the Class of Service reliability and prioritization of data over the network. This is paramount for businesses running a truly converged network with video, database, VoIP, email and Internet riding the same pipes. WAN Optimization is selling due to the cost containment and the performance enhancement. Big bang for the buck.

So the agents can sell mobile broadband, applications via Virtualization or SAAS, and add QOS to the WAN to provide reliable access to these business critical data.

I received yet another press release from the BSA (Business Software Alliance). It was about a funny video. Why the PR firm thought it was relevant to me is astounding.

It got me thinking. Is the BSA losing relevancy?  Two things are shaping the commercial software world:  SAAS and Open Source.

The BSA's job is to stop piracy - in the US mainly. However, piracy around the world dwarfs the US. < I won't rant here about copyright or the fact that there are way too many lawyers.> Needless to say, the BSA makes a living chasing small business owners about licensing. How do they find them? Disgruntled employees who turn them in. (I've seen it happen. Not pretty at all).

When most software moves to the Cloud or as a service, licensing headaches will disappear. (Data security headaches will increase dramatically however). So the BSA is expiring.

In speaking with Microcorp today about their agent event in October in Atlanta, we were discussing a panel on Trends for 2010.  It's not so much about the vendors, it's about the services that the vendors are offering that will become the next revenue stream for the channel.

This ties in with a TCA listserv discussion about Alternative Streams of Revenue for the Channel Agents. TCA will be hosting an agent call about Electricity with a couple of agents who have been selling electricity to businesses in unregulated states for a while. (Paetec offers this to agents as well).  Other topics include Web Strategy (like Lead Generation through Search Engine Marketing (SEM) and Social Media Marketing); SAAS; 4G; the Cloud; and Managed Services.

It won't be enough to just sell TDM in the future, you will need partners to offer Telecom Expense Management (TEM) and Auditing as well as all the new services coming down the pipe (electricity, SAAS, cloud, 4G, VOIP, SIP Trunking, etc.). 

Maybe we are heading into Master Agency 2.0 - the dawn of an era when the master agent will have to be more than a collection of carrier contracts. What do you see that you might need from your Master Agency in the future? Let me know. Thanks.

Because broadband is so slow in the states, Amazon has resorted to allowing companies to mail in their portable devices for data storage and upload. According to Cloudave, it could take "82 days (with 1.54 Mbps T1 connection) to migrate one terabyte of data with 80% network utilization."  So "Amazon has resorted to old fashioned approach from the previous eras. Users can mail Amazon their data in one of the supported portable storage devices and Amazon will transfer it to users' AWS account from within Amazon's high speed internal network."  Sad really.

In VoIP news, M5 Networks, a Genband based hosted PBX company out of NYC, has partnered up with eXpresso, as its collaboration and file-sharing platform. The eXpresso platform is a value-add to the M5 On-Demand conferencing platform.

"The M5 Network phone system has an extensive portfolio of capabilities, but one in particular is especially harmonized with eXpresso: On-Demand Conferencing. That feature enables users to instantly host or attend conference calls on the fly, anytime, from anywhere. In combination with eXpresso, it enables live collaborative meetings where a real work-product is generated. Conventional "Web meetings" don't allow participants to contribute to documents."

It's the next evolution in VoIP -- SAAS.  But I have to ask, Shouldn't Hosted Email be the first App you host with the Voice App? Unified messaging starts with email, chat, and voice. Google Voice has done that by combining the Gmail Inbox with the Google Voicemail box (and the voicemail-to-text feature).

Robert Half interviewed 1400 CIO's for a research study (press release here), It's not a surprising list: Security, VOIP, Virtualization, SAAS, and data center efficiency. Considering power costs much more than space, getting energy and hardware efficient means cost savings. Oh, wait, that's virtualization too. And Software as a service and VOIP. 

In summary, the top tech investments of CIO of companies with 100 or more employees is IT Security and cost cutting initiatives.

Ars technica doesn't believe the articles in CNET and AOL-Tech about people switching back to dial-up. Well, info from dial-up aggregators indicate that dial-up is on the uptick. As some angry comments mention not everyone needs broadband.

Last year we saw the plateau of broadband subscriber numbers. This year we are seeing an increase in dial-up maybe due to the economic situation we face in the US. Certainly, AOL, Earthlink and United Online are showing revenue increases in their financial statements.

If there was a 10% drop of broadband, would that affect VoIP? Unlikely. It would affect Vonage and 8x8 and other stand-alone VoIP players, but it wouldn't have any effect on the Business VoIP businesses nor on SAAS.

Also, bundling means that the consumer probably doesn't know the pricing of the high speed internet component.

Certainly this has to be a consideration for the RUS and NTIA. What if everyone who wants to live online has broadband? What if the $7B results in just a 10% increase in broadband? Will that justify the $7B? Maybe. If the 10% are all business ventures of one kind or another - eBay, Amazon, affiliates, SOHO, freelancers, tele-workers. 

On Twitter this morning, Josh wrote, "Widely discussed leaked doc, Open Cloud Manifesto, originally authored by IBM - http://bit.ly/cloudmanifesto - could be historic".

"The buzz around cloud computing has reached a fever pitch. Some believe it is a disruptive trend representing the next stage in the evolution of the internet. Others believe it is hype, as it uses long established computing technologies. As with any new trend in the IT world, organizations must figure out the benefits and risks of cloud computing and the best way to use this technology."

Everyone knows the upside to Cloud Computing, but the document explains the downside. Number 1 being Security. Compliance isn't listed, but I would think that it might be an issue, especially if security, management and governance are an issue.

IBM signs off by stating, "This document is meant to begin the conversation, not define it." More at www.opencloudmanifesto.org

Software-as-a-service (SAAS) is the new buzz in 2009. Salesforce.com hit a $1B in sales so its the poster child. Google is the other golden child of SAAS pushing is Apps and Gmail to businesses. For me, even hosted email is SAAS.

I am a referral agent for IKANO who is a Google Apps aggregator. , I am having trouble selling service providers on moving to Gmail and Apps. The overall ROI certainly makes the migration appealing, when you take into account Postini anti-spam licensing, server lease, power consumption, collocation space, email server licensing costs, maintenance and support. Seems like the ROI would make it a slamdunk but it is not.

Top 3 Reasons its hard to sell Google Apps:

1. FOG
2. Control
3. Change

FOG is fear of Google. For ISP's, Google is a competitor. Not really, but techies seem to find bogeymen behind every door. Which leads to reason two: Control. Techies have to be able to see the box (server). I call it humping the box. But the service providers have to have total control over the server or they can't sleep at night. Afterall, they are techies, who can run a server better than them? However, if you want to make the transition from techie to businessman, you make decisions based on what is best long-term.  Hey, Nuvox moved to Google Apps - and uses it to get appointments by telling every prospect: "We are partnered with Google. Can we meet to talk about that?" Appointments up 25%.

And finally the change thing. No likes change, especially when we have so much going on around us. It's the same reason that businesses are taking so long in the sales cycle - fear of change. But making No Decision is still making a decision.

You will hear other objections like:

• I just bought the server
• I just upgraded to version 0.7.1.1.1.3b and paid for it.
• I just re-cast my Postini contract

The servers can be re-used for something else. The sunk cost on the software can probably be re-claimed by the move to Outsourcing.

Today, I was talking to a salesperson for Hosted Exchange. We agreed that there are big obstacles to people buying into hosted email - whether Exchange or Gmail.

1. Change
2. Headcount
3. ROI

Again the fear of change is number 1. No one wants to make a decision for it to turn out wrong. No one wants to make a decision because CYA right now may mean you keep your job. But in some cases, making the decision could save your company because SAAS is a cost saver in many cases.

This leads us to Head count. An IT manager isn't going to move to SAAS right now because he will lose the budget justification for his head count (number of employees in his department). Maybe Tech One-Twenty spends only half a day each day on email issues. If you outsource it, what do you do with Tech One-Twenty? He can start working on priority projects or long term initiatives (if he has the skill). Likely, he will need to be let go - and someone has to pick up his half-day of work. Dilemma.

Finally, there is the ROI (return on investment). In some cases, there may not be a return enough to make the move. Even calculating the total cost of ownership (TCO) may not be enough if there is an IT staff.  But if the business doesn't have an IT staff, then moving to SAAS should be a no-brainer.

So how do you sell 40M paid mailboxes on Zimbra? One small business at a time. SOHO and every business with 50 employees or less. Or businesses with old servers or software (like Exchange 2003).

We did discuss that the customer acquisition cost is large. If the sales cycle is 6 or 7 months, a sales person is spending about 4 hours or so on contacting the client to get to the close. then maybe another 3 hours to demo, propose, paperwork, and survey. Provisioning is about 8 hours. So 100 email boxes is costing you 15 hours of labor. At $25 per hour average for a $50K salary, that's $375. But it is really about $488 when you consider that salary is only 70% of it. If you move them to Gmail/GApps the profit is $10 per user / mailbox per year. That's $1000 from $488. That doesn't include ongoing support costs. Just something to think about.