Multi-Cloud success story

Wanted to share what we are accomplishing with a client in Silicon Valley, with several months’ work coming to fruition this quarter.

The company has been a Salesforce.com user for 3+ years and has a solid SFA and customer cases setup.

In 2009 we added these cloud apps: Workday / Zuora / Marketo / InsideView / Echosign / Box Net / SaaSure / Webex / Adaptive Planning / HubSpot / Google Apps & Mail / Paypal / Google Analytics / Google Ad Words.  And we developed a Force.com application for Revenue Recognition and Forecasting.

All of these apps are operational today, with a couple of integrations still in completion stages to further streamline the multi-cloud business flow.

This is a magnificent success story in the making: the company can proudly boast that it runs zero core business systems on premise.

The Quote-to-Cash (Q2C) team goes from leads, prospects and opportunities (Salesforce), to Quotes to subscriptions and orders, to invoices  (Zuora), Accounts Receivable and General Ledger & Financials reporting (Workday) without rekeying a single record and without storing a single transaction on its own datacenter.

The marketing team uses HubSpot and Marketo to strengthen the web marketing and email engine and provide lead scoring.

Several teams use Echosign to send documents to customers and business partners for e-signature.

The use of Single Sign-On (SSO) is just beginning, with SaaSure’s CloudAreaNet, allowing a single URL to manage authentication and provisioning into Google, Salesforce and soon a number of additional apps.

Box Net is in use with a small but growing number of users who store their critical files in the cloud instead of using shared drive on a VPN. The access these files from home, Starbucks, or Stockholm, with no RSA token or VPN.

Enterprise workflow drives notifications to managers for expenses and purchase requisitions approvals, new hire events, supplier requests and new customer requests, all using Workday’s business process engine.

Time to market for all of the above: 6 months execution time; 11 months total elapsed time since kick-off.

Estimate of cost savings vs. on-premise equivalent solutions: 80%. It should be noted that some apps are not available in on-premise versions, as their data domain requires universal database (InsideView, case in point).

Cost of datacenter ops, hardware, software, DBA, staging images, disaster recovery, business continuity and recovery: $0. Yes, zero.

We’re delighted with the developing story and are documenting best practices and useful lessons as we go. This is a repeatable template and is not unique to one customer segment or industry.

Many bloggers publish papers and useful details on cloud strategy. We provide an equally useful service by sharing our findings as we explore new integrations, design business processes that were impossible a few years ago, and we also – necessary – mention some pitfalls in the early adopter’s territory.

Cloud-to-Cloud: time to accelerate

Integration is the key to limitless growth in web marketing and the pursuit of new opportunities.

The mobile web is showing us the way, with dozens of new features appearing every month and rapidly becoming part of our day to day lives. Apps cross borders, firewalls, organizations and companies in ways that appear seamless to the mobile user, but which in fact require detailed attention to security, identity management, audit trails and user confidence.

The real-time web follows a similar trend, where organizational boundaries are increasingly irrelevant. The only meaningful drivers are the tasks these apps are striving to accomplish. Social networking meets shopping meets credit card processing meets online classifieds, etc – all in a simple, visually appealing package that a Facebook user clicks on the right of their page.

How will this trend materialize in the Enterprise? We surely can’t expect to remain stuck with the 1990’s integration tools we inherited in the early days of SaaS. These rigid, old-fashioned structures never worked that well, even for the routine data movements they were designed to carry out 15 years ago. Today, they struggle to keep up on several different levels. 

Prediction: SaaS slower revolution than foreseen

The past year saw a massive turn in public opinion, in favor of Cloud Computing and SaaS architectures compared with 2008. Credibility has clearly made massive gains.

There is also a vibrant, creative and thriving cottage industry around SaaS application development. Most of these contributors won’t make it as viable ventures.  Some will strike gold with breakthrough blends of business tools with social networking marketing muscle and mobile usability, and in doing so they will change our lives and our way of doing business. Others will create viable products and will be bought out before they ever make a big splash.

Is there anything not to like?

Yeah, a couple of things. But not enough to negate the Cloud Computing movement’s massive and continued shake-up of an otherwise stagnant, unimaginative industry.

First the core apps. SAP, Oracle and Microsoft aren’t yet threatened by the emergence of Salesforce.com and the brat pack of SaaS business solutions that sprouted with them. There still isn’t much selection in the SaaS cafeteria for ERP, global supply chain management, financial services and trading systems, healthcare management systems and large scale enterprise core systems.

The monster apps take a decade to evolve, and are not easy for any but the largest software companies to manage. The infrastructure needed to manage a support and service community, with skills and certifications and curriculum management, add  professional services programs and partner networks and knowledge management systems. Now try adding localization and global compliance management – you can quickly see this is not the business of garage software companies.

SAP and Oracle are safe for the time being – but this space too will not stay sacred for long. The garage companies (more accurately, they hand out in Starbucks all day because the incubator space they rent is too crowded, and because home lacks the buzz of an innovators’ clique) are comfortable building quick, clever and amazingly insightful inventions to help you do things you didn’t know you needed to do. Some of these will be our must-have business processes one day soon.

Funding? Yes, it’s hard to get angel investors and even harder to get proper VC funding these days, and there are so many small companies chasing the few funds that are active. This is probably right where it’s supposed to be for the time being. There is just enough money looking for genius, to make the smart developer’s search for investors worthwhile.

What next?

Integration is still very weak and needs new players, new offerings and new standards. Integrating multiple SaaS apps should get easier and easier, while always keeping security top of mind. App developers need to make their environments more open – trying to own all shores in the new world will lead to failure. Businesses will more more and more toward applications-on-demand. Projects will be started as rapid plugins rather than long and meticulous SDLC slugs – unplug that email marketing app from our CRM and plug in this new one – duration: 1 week. Nike: Just Do It.

Imaginative UI development may play a huge role in changing the landscape. Think of an app that isn’t really an app at all – it’s a web page with a few simple navigation  widgets on it. Behind the scenes though, it’s “talking” to your SaaS CRM system, and to your ERP’s inventory system, and to your Credit Card payment engine, and also to your customer portal software and your community site engine. It may be kicked off by a link from your home page, prompting the visitor to log in (portal), then to check how many golf carts are available for rent at their location, etc – all functions that touch multiple apps. The visitor never saw one screen from those apps – the were all ‘covered’ by the web developer’s smart app.

Another area that might develop: expertise on demand. The labor market continues to be sluggish while companies at the front edge of innovation continue to starve for talented people. There isn’t enough smart stuff to go around. HR departments and vendor management systems at large companies work against themselves by trying to push down consulting rates and squeezing lower pay rates out of recruiters and job candidates. To stay out of this circus, many SaaS developers end up working multiple projects concurrently, some with only a few hours per week per client. This adds up to the same long work week, but concentrates several ‘jobs’ into a single person – who usually ends up making a lot more money. Companies don’t mind, as long as they get what they need, quickly, efficiently, and cheaply.

Love these predictions by Appirio

http://www.appirio.com/company/press/2009_1216predictions.php?mkt_tok=3RkMMJWWfF9wsRolvKTfLqzsmxzEJ8r%2F7u87BPbv3sYw3mx7dMXLZRW%2B2w%3D%3D

Appirio’s predictions for 2010 and the next few years.

Who’s holding back innovation?

Look at the possibilities being unleashed by new applications providers.

There’s too much good stuff coming out, for businesses to absorb. CRM applications spring up around the market leaders, offering stunning innovation in social networking, integrations with public domain data, and workgroup / workflow ideas. ERP and financial services packages are complemented by dozens of whizz-bang enhancements to what a knowledge worker can do from their desktop – or home office, or sitting at the coffee shop.

You can read a lot about Venture Capital firms lacking vision, slowing the growth of the visionary inventors. Sure. It would be nice if there were more CV money flowing, and if it were managed by some less reticent and conservative people. However, look at how many new companies in the past 2 years have brought bold innovation to market despite the VC drought.

You’ll also read about midcap and large companies keeping the belt tightened on IT spending – including all technology in use in their companies. While this may be true overall, many established businesses are investing aggressively in new technology. Only not so much in traditional information systems that handle customer-facing services and intercompany processes like supply chain management, etc.

What’s keeping these decision makers from bold action and inquisitive forays into new technology?

The excuse of tight budgets and a weak economy are running out, particularly for older businesses, still lumbered with 1990’s and early 2000’s systems that have now become anti-business systems. Short story: the IT departments are the blocker, instead of being the driving force to great new ideas and highly responsive companies.

IT has painted itself into a corner by cautious, risk-averse management culture and two decades of very large, failed projects as baggage.

We are the ones who deserve a break. We owe ourselves a new outlook, a new way of doing things, that would allow our CEOs once again to view IT as a winning investment.

The only way to get there, right now, is to dump the risk-averse mindset.

Projects shouldn’t need to come in on time as their highest priority constraint. People do what they’re incented to do – they perform based on how they are measured. IT groups have Project Management offices or PMOs. They measure performance. the hardest factor to measure empirically is whether a project delivered a great product and drove a business initiative toward its target. Te easiest things to measure are schedule and budget. PMOs actually work against your company, by measuring aspects that matter less, and therefore encouraging on-time delivery of useless software.

To change this, we have to assemble no-finish-line project teams. The closest thing available today is Agile/Scrum methodology. Even adopting Agile, we need to remove the measurement of project completion. It has to be replaced by product health – today. Imagine: an IT group has a portfolio of 4 major products in use today, 2 more planned for adoption in the next 12 months, and 20 minor products that play a support role within a process or function. Now, take the temperature of each of these products today. Measure its effectiveness in its intended use; measure value add vs. expectations, and ROI today. Then measure its potential value add if certain features were added, or if adoption improved, or data quality we overhauled. Then assemble tiger teams to address the 2-3 products that will get the help right away. Measure the tiger team on what they have delivered this month, and help them plan what they’ll deliver – into production – this month and next month.

Members of the PMO who can’t work this way, should find a new line of work.

Dismantle all multi-year projects. Turn them into tiger teams – team that may well stay together for multi-year assignments – and make them focus on this month’s features, not next year’s.

IT people need a day job that is as close to the pulse of the business as humanly possible. Dismantle all ivory tower colonies. Disperse people back into business groups.

This, hand-in-hand with a radical refocus of applications architecture to Cloud Computing, away from on-premise applications, gets you a miracle cure for the IT Blues. Things suddenly move quickly. Groups can see the results of their work as it hits the pavement in the same month as it was built and debugged and acceptance tested. People feel like their effort makes a difference.

The PMO can continue measuring and policing and enforcing best practices if you can still afford to pay keep them on board. Some of this is valuable as a quarterly reporting exercise to show general managers how much you have achieved in dozens of mini releases instead of those old jumbo Big Bang projects.

Another great advantage of tiger team IT is the speed at which you can course correct. People make mistakes. Teams of smart, well informed analysts can still design a product badly. The faster they can see their error and begin to tune it back to correctness, the better for everyone.

Now you can do this, because you’ve eliminated the enemy of good products: the project schedule.

Opportunities in Cloud Computing

Many companies have built themselves an escape from this depressed economy, by innovating in SaaS and rapidly capitalizing on the only vibrant sector of an otherwise sluggish tech sector.

Xactly Corporation, of San Jose CA, is further solidifying its lead in Sales Compensation Management, with the release of its second SPM product. Xactly now offers a broader range of solutions from large, complex sales organizations with multiple interdependent rule sets, to smaller sales teams needing a rapid deployment, do-it-yourself solution. All of Xactly Corp offerings are multitenant SaaS services – easy and fast to deploy, always uptodate, all served by monthly subscription and zero capital outlay.

Zuora, of Redwood City CA, is rapidly establishing dominance in Subscriptions Management, whether for health clubs or publications or SaaS providers – their Z-Billing suite offers a comprehensive solution to manage new clients, renewals, invoicing, quoting and more. All of this is multitenant SaaS – no baggage with unsupported versions, client upgrade projects, patches and local bug fixes.

SaaSure, a new company based in San Francisco CA, offers single sign-on and centralized user admin for multiple saas platforms. Their potential is huge: how many users on salesforce.com + google apps + workday + success factors + +? Do the math – even as low as a few $ per user per month, this is big money.

So where are the remaining opportunities, and who will capitalize on these?

ERP: while this is not a simple space to occupy, it remains open. SAP and Oracle have been slow to move and claim pole position in their own territory. While their marketing arms announce impressive strategies for cloud computing, their current offerings fall short, leaving pro-SaaS customers to shop around.

Workday offers a relatively strong HR solution, with a young and quickly evolving financials product available on the same base platform. The feature set lacks a supply chain management ERP, and is light on standard accounting reporting functions. It’s better suited to larger companies with bigger implementation teams.

FinancialForce.com – the new  joint venture between Salesforce.com and Coda, offers accessible, rapid deployment solution for basic accounting, invoicing, receivables and payables, with a strong evolution path to more advanced business process over time. Currently, it does not cover all of the feature checklist you would expect a Fortune 500 CFO to demand. However, this space, FinancialForce will be there.

Integration: the biggest challenge facing a saas-adopting company today is how to get these different clouds to talk to eachother. And, in many cases, to talk to the on-premise systems that aren’t going away anytime soon.

Integrators include Boomi, Cast Iron Systems, Pervasive, Informatica and many more. However, they all face the same question: beyond their own – often elegant and impressive – user interface and architecture, they still have to talk at a low level with each source and destination providers’ web services. This group has not completed its evolution – a fact that becomes obvious when a non-developer attempts to take a peek under the hood. Integrators may force the next chapter by inventing a universal layer, where all providers will eventually expose an easy-to-dial ‘plumbing’ screen. This has been attempted many times, but architectures like SOA still tend to serve the developer community rather than completely democratizing the integration space. Any startup that can deliver a techie-free integrator product, will be a guaranteed rock star in two years.

Social Networks and enterprise software: the use cases haven’t all been written yet, nor even dreamed up. They’re still out there. From simple tasks, like helping a recruiter pull together a candidate’s Linkedin, Facebook, Twitter, Blogger and Digg accounts, and managing feeds that allow easy access to noteworthy entries. To managing web traffic via a Facebook page, generating and friending new leads from blogs and community sites, to creating bona fide leads in your CRM, all without any human touch. Go figure.

Opportunities await too, in more official web content relating to individuals and companies, and their corresponding records in your ERP / HR universe. Big brother will have fun here. Imagine: from simple updates to credit scores when the last payment on a car is made, to massive, multi-dimensional demographic data extracts, feeding directly into a marketing campaign in salesforce.com, designed to place a “friend suggestion” on all the candidates’ facebook pages for a service that helps with federal loan refinancing. Every piece of it 100% automated.

Also, with individual web users’ ability to interact directly with their records deep inside corporate databases, we’re poised for new use cases and even whole new markets. Private data merges more and more into semi-private data, to public  data. My credit report can become a public voting page, a big free for all where my local chiropractor can vote me down but my tennis club can give me two thumbs up, making my final score 4.2 stars out of 5.

Spectacular opportunities exist in aggregated data. All becoming possible because of cloud computing, where behavior patterns come out in the rub when millions – hundreds of millions – of people do similar things in the same environment. When misused, this is scary stuff: record level, individual data in the SaaS model is sacred property of customer. However, when aggregated, semi-anonymous data turns into a goldmine to its owner.

CRM providers can measure incoming leads, lead conversion rates, opportunity conversion rates and finished deal values, across all customers, and by region, industry, trended by month, day, year-on-year.  Aggregated data is just beginning to show us what secrets it can reveal.

Other opportunities may reside in small business management and the democratization of big company systems – suddenly available to tiny companies, if they have the appetite, and the smarts, to adopt these powerful tools. Small business consulting can take on a new role, setting up, installing and managing CRM, Financials, Fulfillment and Service systems for small business owners who had no idea they could run their $<3M companies in a shoestring budget and get massive efficiencies from them.

All of this is great news for (almost) all of us: a stronger exit from the weak economy, massive opportunity for those with vision, improved productivity for bolder organizations. And, most exciting of all – a shake-up of the status quo in enterprise business systems.

How to keep up?

The rate of change in IT2.0 / web2.0 is exponential. How does a well-run organization set a goal, evaluate best of breed, and adopt? In the time it takes to research the market for the leading solutions, there’s already a new player on the scene. Then, once you’ve set about subscribing, and managing change to adopt your chosen winner, one of the names (hopefully not the one you picked) has disappeared. Either through acquisition or bankruptcy, or dropping a product line.
What to do?
We believe in pushing forward regardless. These are the reasons:
you learn more by implementing, adopting, and evolving, than you do by scurrilous research beyond the first few weeks of assessing the market’s current offerings.
You can always change course, if your preferred app and provider are acquired by a company you didn’t plan on doing business with.
You will be stronger, smarter and better equipped to adopt ever faster change, after you’ve been forced to switch cloud strategy at least once along the way.
The exit barrier is almost as low and easy to overcome as the entry barrier. Your subscription can be cancelled, your new one written up, and your data can be yours – and rapidly being munched by the conversion process – within weeks.
Why do IT2.0 consultants stress this point?
Because older methods and force of habit tend to encourage project teams to proceed cautiously and to create long schedules for change management.
This is wrong – this notion is built on a fundamental wisdom that has become obsolete: rapid change, without planning every bit of minutiae, is smarter and more effective – and more economical – than traditional approach.
Look around for examples of new and old change management – time and again, the “do it on the fly” brigade is winning the game.

Building a new version of the SaaS vs. On-Premise ROI model

There’s been enough cost comparison chatter in the past few days to spark  a renewed effort at illustrating costs, returns, and opportunity costs in a landscape of traditional IT organization, compared with a fully SaaS on-demand IT organization.

I will then offer this to some devil’s advocate discussion. I challenge you to pick my numbers apart, and tell me SaaS isn’t actually a 60% more cost-effective, and 80% faster way of delivering to your business!

Coming tomorrow: some graphs, charts and base assumptions – ready for debate with the nay-sayers.

After that, we’ll discuss the economics of applications vendors, on-premise, SaaS, and hybrid. I’ll explain why the hybrid is crazy talk and just doesn’t work.

Dreamforce 2009 – Day Two

Another very productive and inspiring day at DF09.
The keynote session is always harder to pull together on the second day – Marc Benioff addresses the developer and partner community and talks about the force.com platform. Developers, well it’s like herding cats. They stay while they’re interested and they drift out the door by the hundreds the second their ADD kicks in. Bless them.
Narinder Singh was brilliant today. His energy matches Marc’s, so at times he doesn’t let Marc interrupt him. He demo’d a brilliant use case with force.com, sites, and chatter.
Chatter has gigantic implications for enterprise information. We could have so much fun with this: “yeah, I had to un-friend my boss”.
Observations on the attendees: there is a distinct increase in the mainframe veterans demographic. Amazingly, those people still in the workforce who scoffed at the internet in 1994 and who blasted early SaaS providers as unrealistic and impractical, were here soaking up the new ideas and trying to find ways of becoming successful at this stage of their careers. And some of them will be successful – they’ll be sparked by the possibilities and the removal of barriers to success. After, it was the IT managers of the past two decades who build the cages that made IT unsuccessful. Policies and procedures, PMOs with best practices rules and checks and balances. Datacenter Operations with dizzying complexity of environments and stacks to manage, all designed to crash when one element fails. How could an IT group ever be respected as a positive force in business?

Dreamforce 2009 – Day One

An excellent day-one at Dreamforce.
(My) Companies to watch: Xactly Corp, Zuora, Financialforce.com, Salesforce.com Chatter, Appirio, iLinc, SaaSure.
We had front row seats for today’s kickoff – here’s a summary.
Marc Benioff did yet another excellent job with his keynote address, talking through the latest performance numbers of Salesforce.com’s most recent quarter, current subscriber and transaction volumes, plus an update on the company’s philanthropic work. Mayor Gavin Newsom made an appearance and acknowledged the efforts and bantered with Marc.
The new user interface was unveiled, and yes, it looks terrific. It’s also more powerful, and less busy, using more web2.0 mouseovers and quick clicks.
Service Cloud and Sales Cloud both unveiled exciting new features – some available today (Quotes, genius, twitter integration and more) while remaining very recognizable for existing users.
A less frequently touted advantage of three updates a year is the forward momentum it allows users, without ever causing a major reset, as happens with traditional enterprise software, with annual or 24-month updates.
Marc’s big update today was Chatter.
Essentially, it’s a twitter-like structure built entirely inside the trusted salesforce.com universe. The difference is you can follow an opportunity, a client, a group, a project, a person or any other object inside – and outside of – your SFDC domain. The audience’s body language seemed to say “Cool…. sort of…”. As usual, Marc Benioff and Parker Harris are a couple of years ahead of the enterprise IT industry, asking why can’t executives and managers and knowledge workers ‘follow’ stuff just like they do their Facebook friends? And they’ve delivered (or will deliver, next year) this into salesforce.
This is another massive leap for the more imaginative users of SFDC’s tools, and probably just a minor plus for those still struggling to absorb and implement the basics of CRM and service into their organizations.
Missing from today’s keynote: Financialforce.com – the massive implications for enterprise software vendors, now that salesforce.com has a presence in ERP and financials.
I imagine their strategy will be to aggressively pursue a large customer base, small. medium and large, and later expand the feature base and sophistication levels to meet the big players’ offerings.
The initial advantages are obvious: vastly reduced implementation failure rate, 75% discount per user per month vs. on premise ERP, zero datacenter footprint, no upgrades and patches to manage yourself, and 99.9999 uptime.
More updates on this story – stay tuned.
Other great updates today: SaaSure is on target to begin beta with 3 customers in December: single sign-on in the cloud, unifying popular apps from different vendors into a single URL, strongly authenticated at the front door, then fully provisioned to each of the apps ‘inside’. You won’t need that RSA token or that VPN inconvenience when logging in from Tahoe, or Tokyo, or Tully’s next door.
Watch this space – more updates on more companies, changing the world of business systems.