Sage’s Everest: Building Mind and Market Share With A New Generation of SMBs

Posted on August 4, 2015 by lauriemccabe

everestAt last week’s Sage Summit, one of the featured speakers was renowned British explorer, entrepreneur and adventurer Justin Packshaw. Among other achievements, Packshaw spoke about the challenges he and his team of 10 climbers faced to successfully reach—and then descend—the peak of Mount Everest, the highest mountain on the planet.

Watching Sage’s new (as of November 2014) CEO Steven Kelly interview Packshaw, I couldn’t help but think about the uphill battle that Sage has faced in attracting net-new customers to its accounting and ERP software solutions over the past several years. While many rivals were quick to bring innovative cloud, mobile and social capabilities into their solutions, Sage has taken a slower, more conservative approach. As a result, although Sage has done a fairly good job of retaining existing customers, it has struggled to gain mind and market share with new generation of cloud and mobile savvy SMB customers that it needs to fuel substantive growth.

Making the Case for the New Sage

Steven KellyKicking off the event, CEO  Kelly made his case for a newly energized and more engaged Sage. At the 50,000 foot level, Kelly:

  • Pledged Sage’s commitment to “being the best technology company for small businesses,” by providing small businesses with help to run their businesses, give them more control, and help them make the right choices.
  • Positioned Sage at the forefront of the “golden triangle” of accounting, payroll and payments solutions to make small businesses “100% compliant, 100% of the time.”
  • Reiterated that Sage “loves on premises, hybrid and cloud solutions” and will support all of these models to give businesses choice.
  • Vowed that “end of life” is not part of the Sage vocabulary. Sage won’t force existing customers to go to the cloud before they are ready; instead, it will provide pathways and tools that enable customers to control the pace of their migration.
  • Asserted that the term ERP (enterprise resource planning) really means “expense, regret and pain,” and that Sage will also banish this term from its vocabulary (which by the way, got a pretty big round of applause).

All of the above should be welcome news for existing Sage customers, who have stayed the course through numerous changes in Sage strategy, management and products over the past few years. But, it doesn’t offer much in the way of helping Sage attract net-new customers So how will Sage ascent its Everest? 

Sage Live: Poster Child for the New Sage

sageliveKelly’s roadmap for new growth focuses on rapid, global new solution development for next-generation business decision-makers who are already sold on a cloud and mobile first world. Sage One, Sage’s offering for sole proprietors and very small businesses from pen and paper and spreadsheets, is part of this, but Sage Live  (formerly Sage Life) is really the poster child for Sage’s new approach tailored to the “office of the future.” Notably, Sage Live was designed and developed in six months from when Kelly gave the team its marching orders.

Built as a multi-tenant cloud-based accounting solution. Sage Live is aimed  squarely at growing small businesses who need more power than entry-level accounting solutions offer, and want cloud, mobile and collaborative capabilities out-of-the-box. Pricing starts at $30/user/month for full users (such as finance and accounting users) and $15 per user/month pricing for more casual business users. Slated for U.S. release now, and for UK availability at the end of the summer, Sage Live is designed to be a global solution.

The Salesforce1 Shortcut

Sage choose to build Sage Live on Salesforce1, the largest cloud development platform in the world, to gain development and go-to-market efficiencies, including:

  • A rapid development environment and tools to design, build and bring the solution to market.
  • The ability to embed Salesforce1 mobile and collaborative functionality, such as Chatter, directly into the Sage Live solution.
  • An enormous partner ecosystem to add features and functions for specific markets. For example, Kimble PSA announced its integration with Sage Live at the event. With a partner-centric approach from the get-go, Sage Live doesn’t need to become a clunky, monolithic solution.
  • The same look and feel as Salesforce, giving Sage a natural entrée into Salesforce’s 95,000 SMB installed base customers. 

Customer-Centric Design

Salesforce1’s platform also made it easy for Sage to pull in its best small business accounting experts from around the world to collaborate on Sage Live. Sage also involved customers in its early adopter program from the beginning, seeking out non-Sage customers–both owners and those in financial roles—for input.

What Sage heard is that they are spending too much time juggling too many spreadsheets. As their businesses grow, they need better tools to budget and forecast, the ability to look at their business through different lenses, and more collaborative capabilities. They want a “one-office approach” with easy cloud and mobile access to real-time information for all users.

In response, Sage Live’s multi-dimensional accounting engine allows users tag records with geographical, product or other information. Users can then easily pull up different views and reports based on the tags. The solution can also be configured for different role-based views or “scoreboards” giving users just the information most relevant to them.

iwatchEmbedded Salesforce1 real-time social and mobile capabilities make it easy for users to collaborate and share information, ala the “business in the moment” example of Sage Live notifications on Apple iWatch.

Perspective

New and fast-growth SMBs are increasingly gravitating to the cloud for accounting and ERP. SMB Group’s 2015 SMB Routes to Market Study reveals that 29% of SMBs planning to purchase new accounting/ERP solutions are leaning toward cloud deployments. Sage Live provides Sage with a much-needed solution to tap into this market, and meet it’s elusive (to date) challenge of attracting net-new business. 

While some have questioned the wisdom of building on Salesforce1, I believe that this was a good choice for Sage. Salesforce1 has enabled Sage to skip the plumbing work and to build Sage Live much more quickly than it could have from scratch. Furthermore, Sage gains exposure to Salesforce’s large SMB customer base, and an entrée to Salesforce’s extensive developer ecosystem.

In addition, while Salesforce customers have many choices when it comes to accounting solutions, Sage Live is the only small business accounting solution native to the Salesforce1 platform (FinancialForce is native as well, but aimed more at the midmarket).

Finally, armed with a true “net-native” cloud solution, Sage can apply its extensive expertise as a volume SMB marketer to the cloud and mobile first SMB segment. Sage is even opening a new Customer Business Center, exclusively dedicated to digital marketing and sales for the Sage Live solution.

However, this is not enough to ensure success. I see a few areas in which Sage will need to double down, including:

  • Creating a clear, constant drumbeat to articulate why Sage Live is different from other Sage and its competitors’ offerings. Getting on SMB radar is hard in a market where so many vendors are vying for customers that have outgrown QuickBooks and other entry-level accounting solutions. And, since SMBs rank “Figuring out how different technology solutions can help my business” as one of their top three technology challenges in SMB Group’s SMB Routes to Market surveys. Sage will also need to provide in-depth education to make it to SMB short lists.
  • Persuade Salesforce to more actively promote Sage Live. From what I gathered at Sage Summit, Salesforce sales reps will refer customers to Sage Live if they want to integrate accounting and CRM. This is a start, but fairly passive. Sage Live needs Salesforce to play a more active role to kick-start consideration and adoption. Sage will be a Platinum sponsor at Dreamforce, and it will be interesting to see how Salesforce reciprocates.
  • Prove that it can expand traction with developer partners. To further validate its cloud direction and ambitions, and to fill in key gaps for critical customer segments, Sage must quickly recruit high-profile Salesforce developers to the Sage Live fold.

Prior to Kelly’s appointment, Sage had been investing in new technologies to modernize its existing accounting payroll and payments solutions for quite some time. But progress seemed to be slow, and it was clear that simply moving existing solutions would not be enough to fuel significant  growth. With Sage Live, Steven Kelly is already operating at a bolder, faster and more aggressive pace than his predecessors to pursue this growth. Now, having proved it can get on the fast track with product development, Sage’s next—and bigger challenge—is to get on the fast track with marketing and sales.

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Intuit and Salesforce Partner Up: Who’s the Big Winner?

Posted on April 4, 2011 by lauriemccabe

Last week, Intuit and Salesforce.com announced that they would partner to integrate Intuit QuickBooks and QuickBooks Online small business accounting software with Salesforce’s small business CRM editions (Contact Manager, Group and Professional).

Under the terms of the deal, Intuit will resell a pre-integrated version of the Salesforce CRM application via Intuit’s App Center (as well as Intuit channel partners). Data will be automatically synchronized across QuickBooks and Salesforce, giving customers a real-time, unified view of the data, regardless of which application the customer is working in.

Intuit and Salesforce indicated that the integration should be completed this summer.

Above the Surface

Clearly, the deal provides Salesforce with a great entrée to Intuit’s 4.5 million QuickBooks users, gives Intuit a marquee CRM partner in the App Center.

This is also a very big deal for customers. While the small business CRM market is fragmented, Salesforce is a top CRM vendor in small business. Demand for integration between QuickBooks and Salesforce is evidenced by the fact that so many integration vendors—Dell-Boomi, Pervasive, Informatica, IBM-Cast Iron and others—offer this integration, which is typically priced at about $50 to $75 per month. With a direct QuickBooks-Salesforce integration, small businesses get a seamless way to synchronize data between QuickBooks and Salesforce.com without having to buy an additional integration service or solution. (Although pricing has yet to be announced, I’ve been told that it will be more economical than using third-party integration tools).

Below the Surface

The partnership also provides Intuit with substantial validation for the approach it has taken with the Intuit Partner Platform  (Intuit Partner Platform: Changing the Rules of Cloud Platforms with Federated Applications). Intuit’s “federated applications” approach means that instead of having to rewrite applications from scratch, partners that have built their applications on other cloud platforms can use basic XML integration to configure or “federate” their solutions with key integration points, including the user interface, billing, account management and permissions, data and single sign-on to ensure that their solutions integrate with QuickBooks and other solutions on the Intuit Workplace.

This approach removes a lot of development and partnering barriers—in fact, it seems that it removed enough barriers for Salesforce that it is, for the first time, providing its solutions via a partner’s platform, rather than requiring the partner to develop on Force.com.

Salesforce also gains a new venue for Chatter (free with all of its CRM offerings, including the small business editions noted above). As I’ve said many times, collaboration is the only activity that every employee in every company engages in everyday. In addition to getting another on ramp for CRM, Salesforce can also make new market inroads for Chatter and its collaboration strategy ( Salesforce’s Dimdim Acquisition–Adding to a String of Collaboration Pearls).

Quick Take

Many analysts and pundits have been asking (and arguing about) whether this is a bigger win for Salesforce.com or for Intuit. At first blush, my take was that Salesforce would potentially have more to gain because Intuit would be promoting and selling Salesforce CRM and Chatter to its installed base.

Giving it a little more thought, I’m thinking it’s a pretty balanced deal. Having a high-profile partner such as Salesforce should help Intuit attract more end-user customers to its App Center, and pull in more developers as well—in line with its goal to establish the App Center as “the” app store for small businesses.

Small businesses win big too. Integrating business solutions shouldn’t cost more than the business solutions themselves, and this partnership should make integration and the benefits it provides more attainable for more small businesses.

Furthermore, there’s nothing exclusive about the deal for either party. Salesforce, will, of course, continue to partner up with FinancialForce, Intacct and countless other financials vendors, and Intuit can do the same with CRM and collaboration vendors.  Which is a good thing—because small business is anything but a one-size-fits-all market, and neither vendor should presume that this is the best accounting-CRM pairing for all of their small business customers.

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What is Hybrid Computing, and Why Should You Care?

Posted on June 10, 2010 by lauriemccabe

(Originally published on June 9, 2010, in Small Business Computing)

What is Hybrid Computing?

A hybrid computing platform lets customers connect the packaged small business software applications that they run on their own internal desktops or servers to applications that run in the cloud.

As discussed in What is Cloud Computing and Why Should You Care?, more software vendors are deciding to develop and deliver new applications as cloud-based, software-as-a-service (SaaS) solutions. This model helps them reach a broader market and serve customers more efficiently and cost-effectively. And, because cloud computing can often provide significant cost, time and ease-of-use benefits, more companies are choosing to buy and deploy cloud computing solutions instead of conventional on-premise software as new solutions needs arise.

However, most companies will continue to use a combination of both traditional on-premise software and cloud-based SaaS solutions. Think about it: You are unlikely to get rid of an application you’re running in-house just to swap in a SaaS solution. But if you need a new solution, you’re likely to look a range of options, including SaaS applications, to fit the bill. In some newer areas — such as email marketing or social media management — this may be the only way solutions are even available. In cases where you have a choice, you may simply decide that the SaaS model makes more sense, or that traditional deployment will work better for your company.

Why Should You Care?

Many software vendors with a strong presence and customer base in the traditional packaged or “on-premise” software world are developing platforms that provide new SaaS solutions that extend and integrate with their traditional on-premise applications. Some vendors provide app stores or marketplaces to make it easier for you to find solutions that will work well with those you already have.

For instance, Intuit has developed a platform and Intuit’s Workplace App Center so that customers can find and try applications that work with QuickBooks and with each other. Microsoft’s Software + Service strategy is designed to connect a myriad of Microsoft’s traditional software applications to Web-based SaaS solutions.

Recently, Sage launched its Connected Services offerings, designed to connect users of its traditional packaged software offerings with online SaaS services. The Sage e-Marketing application, for example, connects ACT and SalesLogix users with online email marketing services, while many of Sage’s accounting solutions connect with its new Sage Exchange online payment processing.

These vendors realize that most companies will use a mix of on-premise and SaaS solutions for a very long time. While companies can get some value from using some point solutions in a standalone fashion, in many cases, you’ll need to integrate the new SaaS solution with an existing on-premise application — such as integrating payroll to accounting and HR, or social media management to contact or customer management application — to get the value and efficiencies you need.

From the standpoint of their own corporate interests, vendors can increase revenues and profitability by selling existing customers new SaaS services (either their own or those of their partners) to connect to and extend on-premise solutions they’re already using. Having a strong SaaS play that is integrated with their on-premise solutions also helps them protect against competitive SaaS-only vendors that could steadily encroach on their turf.

More altruistically, these vendors want to offer their customers the means to bridge between the on-premise and SaaS solution worlds more easily. After all, it can be very confusing to even sort through and differentiate between all the solutions in a given category, and expensive and time-consuming to integrate them so they work well and easily with what you’re already using.

What to Consider

Most small businesses run at least a couple of on-premise software applications that are critical to their business. For instance, it’s a good bet that accounting and financials are on this list. Other applications will vary depending on the business you’re in, but could include things such as solutions to manage contacts and customers, projects, human resources, logistics or a function specific to your industry.

As you identify and prioritize new requirements to streamline and automate additional tasks, think about the overlaps they’ll require with workflows in the core on-premise solutions and processes that you’re using. For instance, if you decide you want to streamline payments processing, does your accounting software vendor provide a payments processing service that can easily snap into the accounting application?

By taking advantage of the SaaS offerings available from a vendor’s hybrid computing platform, your new solution will generally be up, running and integrated with the core application much more quickly. However, keep in mind that as you snap more services into that core on-premise application, your reliance on that anchor application will grow — arguably making it harder to switch should your needs change.

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Dell 2.0: Top Takeaways from Dell’s Virtual Era Event

Posted on April 6, 2010 by lauriemccabe

A couple of weeks ago, I attended Dell’s Solutions for a Virtual Era analyst and press event in San Francisco. At the event, Dell unveiled its new strategy to help companies more readily and easily provision computing capabilities to in the ubiquitous anytime, anywhere information era. At the event, Dell introduced several new hardware offerings based on the new Intel Xeon 5600 architecture to enable cloud-based solution deployment. But for me, the more interesting focus was Dell’s ambitious vision and roadmap to capitalize on the shift to cloud computing, and market demand for better, more cost-effective and easier to deploy, use and manage IT solutions. Here are a few of my top takeaways about what Dell’s vision, how it plans to execute on it and my commentary.

  • Change the economics of IT. Companies spend more than 50% of their IT budgets just to keep the systems they have up and running—stunting investments in new IT solutions that can help them to innovate and grow. Dell intends to apply its “direct” DNA and supply chain know-how to automate IT and change the economic equation to help companies get out of this quagmire. By delivering “open, capable and affordable” solutions with industry standard-based building blocks, Dell believes that it can reduce technology lock-in, complexity and cost for customers. Some specific capabilities in the works include autonomic self-maintenance and management; automated dynamic allocation of resources, and policy-driven management. In a recent keynote at Oracle OpenWorld, IT budgets in North America amount to $1.2 trillion, but through widespread adoption of x86 servers managed in a more automated fashion, $200 billion could be saved, asserted Michael Dell, president and CEO of Dell. He used Dell’s own plan to take $200 million out of its own IT spending by the end of 2010 as evidence that Dell–which provides two of every five x86 servers shipped–can help customers achieve this goal. Our recent research on Dell Managed Services customers also provides a strong proof point that Dell can deliver on this goal: built on its Silverback and Everdream acquisitions, web-based technologies, and Dell data center expertise, Dell Managed Services offers SMBs web-based, standardized infrastructure management services on a pay-as-you-go basis. I’m kind of surprised that its taken so long for Dell to get around to this, as its business model and technology legacy (Dell has no proprietary systems of its own) affords it a significant opportunity to differentiate.
  • Move from delivering solution components to delivering the total solutions experience. In Dell’s view, companies today spend far too much time, energy and money deploying, running and managing IT solutions. Dell wants will to simplify and make IT more affordable with turnkey, pre-tested, pre-assembled solutions that combine hardware, software and services. Although this may seem like a radical departure for Dell—best known as a hardware vendor—the company has been building towards this for quite some time, acquiring software companies (including KACE, Silverback and Everdream), along with Perot Systems. In addition, Dell is partnering with companies including Joyent, VMWare, Microsoft, Aster Data, Canonical and Greenplum) to provide additional solutions expertise and components.
  • Give customers “and” instead of “or” choices. Dell intends to help customers simultaneously pursue evolutionary and revolutionary paths towards cloud computing. To facilitate the evolutionary path, Dell’s Cloud Partner Program (partners include Citrix, Microsoft and VMware) enables companies to migrate legacy applications to more efficient virtual environments, pre-tested and optimized for Dell systems. On the revolutionary path, Dell’s platform-as-a-service (PaaS) will offer an efficient, scalable and flexible platform to deploy and manage new Web application workloads. Dell’s inspiration for this comes from its own Data Center Solutions Group, which provides cloud and high-performance computing solutions for companies that require massive hyper scale environments such as Facebook, Ask.com and Microsoft Azure. Dell’s open source platform is built on PHP, Python, Ruby on Rails, and runs Apache, MySQL, Rails and Java. The vendor plans to offer a full spectrum of delivery options, where customers can self-integrated components or turn on everything as a service. The initial target market for the platform is ISVs, telcos and others who would build on top on it, and sell through their services to end-user customers. However, Dell left the door open to offering it directly to the end-user market at some point in the future.
  • Start with a mid-market design point. Dell’s design point for the Virtual Era is the mid-market—which is a very big deal! Starting with mid-market requirements and scaling up or down from there can give Dell a big competitive edge—for a couple of important reasons. First, mid-market companies have complex IT needs, but scarce IT resources–they can’t afford a lot of expensive labor or IT tools. This aligns well with Dell’s theme of automating IT. Second, Dell’s major competitors, HP and IBM, offer mid-market solutions, but tend, more often than not, to gravitate towards a large enterprise design point for infrastructure solutions. Finally, history has proven that it’s very hard to scale down successfully. One concern I do have is that I heard different definitions for how Dell is defining mid-market in this context. Will Dell center the design point around its traditional definition of medium business (100 to 499 employees), or upwards into what I would call the upper mid-market—topping out at about 5,000? Dell needs to be clear on this because there’s a big difference in designing for 5,000 versus 500 employee firms.
  • Lead in listening. Dell has been a pioneer in building open community forums for customer input and dialogue. The vendor learned the hard way that in a Web 2.0 world, its important it is to let it all hang out–the good, the bad and the ugly. Dell was blindsided in 2005, when professor and blogger Jeff Jarvis used the phrase “Dell Hell” in his blog to describe his experience with Dell support. His blog unleashed a torrent of blogger complaints about Dell service, and escalated into an avalanche of unwanted media attention in publications such as The New York Times and Business Week. Once the shock wore off, Dell took action to listen proactively to and get involved in conversations relevant to its business and interests, globally and 24/7. Since then, Dell has dug deeper into social media to harvest and apply the collective wisdom of ever-larger crowds. Taking advantage of what it calls its “direct nature”, Dell intends to expand these initiatives. As an example, to reach and support their almost 400,000 fans on Facebook, Dell now provides “Dell Support on Facebook” widget on the Dell fan page. The widget is designed to provide Dell fans a way to engage with Dell support via Facebook to get assistance with technical and non-technical issues, check on an order status or any other issue they may be experiencing. Since the launch, Dell’s “customers’ heroes” team is touching about 3,500 customers a week through this widget, catching potential issues and flagging them so Dell can alert impacted customers and get issues fixed early. With social media rapidly displacing traditional one-way marketing in terms of influence, this should provide Dell with an enormous return.
  • Turn up the marketing volume. At the same time, Dell readily admitted that it needs to beat its own drum louder and more clearly to rise above the din in the industry. I think Dell is off to a good start with this event (the first analyst event they’ve held in a few years). I was also impressed with their executives’ ability to rein in business and IT jargon in most pitches. And, when execs did use motherhood and apple pie terms such as “open, capable and affordable” (which almost every IT vendor uses) they did a good job of following up with explanations about how they will actually deliver to those lofty goals. To really fire things up though, Dell will need to get more creative with broad and creative marketing campaigns that spark attention and interest around this new Dell and what it has to offer.

Since essentially reinventing the PC and x-86 server markets with its direct and efficient supply chain model, Dell has taken its share of lumps over the last few years for not moving past its traditional hardware-centric comfort zone. In the cloud era, Dell has the opportunity to create a new game, with new rules—ones that will favor its strengths and approach. Improving operational efficiencies has always been at the core of Dell’s DNA—a strength it can capitalize on again if it executes well in the solution, marketing and partner endeavors that back up its vision.

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Flying Through the Cloud: Dreamforce Takeaways at 50,000 Feet

Posted on November 30, 2009 by lauriemccabe

A couple of weeks ago, I attended Salesforce.com’s Dreamforce event–along with about 19,000 other people. Having had a chance to digest the proceedings (as well as Thanksgiving dinner), here’s my commentary on what stood out as the top takeaways from the conference in terms of where Salesforce is headed and what it means for the software industry and market.

  • Super-charged energy levels. Ever the master of marketing, Marc Benioff did not disappoint. As he continues to thrust Salesforce beyond its CRM roots into ever-widening orbits, Benioff’s passion and enthusiasm remain high—and contagious, as evidenced by  the strong turnout, constant tweeting and feedback I heard in many 1-1 partner and customer conversations. (Not to mention that people were lined up to have their pictures taken with Salesforce mascots Saasy and Chatty…scary!). More to the point, the energy level at Dreamforce was off the charts in comparison to most recent industry events. While it’s easy to be cynical about people drinking the Kool-Aid, it seems the substance is there to sustain Salesforce’s energy. Competitors will need to dig deep to inspire the same intensity of purpose as Benioff breaks new ground in quest to develop Salesforce.com’s next billion dollar market.
  • May the Force be with you. Force.com, Salesforce.com’s cloud computing platform-as-a-service (PaaS), is fueling a lot of this energy. Force.com enables people to build multi-tenant software-as-a-service (SaaS) applications that are hosted on Salesforce.com’s servers. A long line of customers and partners testified to the power of the Force–which is basically that it gives them a fast, easy, low risk way to build applications.  According to Salesforce, 200,000 people are now developing on the platform, and 100,000 custom applications have already been built for it. More important, Force.com is racking up wins across many segments, including small end-user customers, such as Ball In Air, to larger corporate customers, such as Kelly Services. On the commercial development side, Salesforce has reeled in an impressive roster of partners large and small, young and established. Here’s a sampler: Xactly launched a new sales performance solution for small and medium businesses (SMBs); FinancialForce, which Salesforce invested in with Coda to to deliver business critical financials solutions on the platform; BMC is partnering with Salesforce to bring Service Desk Express to the Force.com platform in 2010; and CA and Salesforce are teaming up to deliver agile development management via the Force.com platform.  As Force.com development momentum accelerates, it leaves less time and money for companies to invest with  traditional platform powerhouses such as Microsoft and IBM.
  • Unveiling Chatter. The biggest news was about Chatter, Salesforce’s strategy to aggregate social media streams into a single place. According to Salesforce, Chatter will both a collaboration application and a platform for building social cloud-computing apps, and will be available sometime in 2010. To me  “chatter” is one of those words that can get very annoying when overused—and Benioff must have used the word “Chatter” about 80 gazillion times in the keynote alone, leading me to imagine that he will have the Rolling Stones rewrite Shattered to Chattered as a marketing gimmick. But with adoption of social media skyrocketing, Salesforce is likely envisioning Chatter as a good bet for it’s next billion in revenues. After all, collaboration is the one thing every employee does, every day, regardless of role. Naturally, Salesforce has set its sights on the collaboration gorillas,  IBM Lotus and Microsoft SharePoint. Of course, this is unchartered territory for Salesforce, which hasn’t really ventured here before, and it will have to navigate a lot of new turf in areas such as corporate governanc, which bigger rivals have had years of experience with. At the same time, Salesforce will also need to deal with newer, more nimble Davids–such as CloudProfile, which lets small businesses manage both outgoing and incoming social media in one place.
  • No longer David, not yet Goliath. Salesforce has clearly left the David stage of development, but is not yet a Goliath. At the analyst luncheon, a very astute analyst (apologies that I did not get his name) asked Benioff how Salesforce will position itself and operate now that it’s a billion dollar company, with a very large appetite for a bigger chunk of the software pie. Benioff assured us that Salesforce still wants to do good in the world and put customers first, etc. (I’m paraphrasing of course). However, a new crop of Davids, such as Zoho, are nipping at Salesforce’s heels, with effective guerilla marketing, strong viral adoption and no/low cost offerings. As a tweener, Salesforce must navigate and position amidst the competition from both above and below. Just as important, it will need to rethink its “co-opetition” agenda. For instance, Benioff repeatedly cast IBM Lotus as old-school collaboration, apparently unaware (or unwilling to acknowledge) that Lotus has reinvented itself for the world of Web 2.0 and social media with offerings such as Connections, LotusLive, Sametime, Quickr—just to name a few. In fact, the vision for Chatter looks a lot like Lotus Connections.

Apart from feeling a bit too chattered, my overall take is that Salesforce will continue to rearrange the competitive landscape as it moves into new areas. While it’s not always the first to innovate, Salesforce is among the best when it comes to helping customers “get it” in terms of  using new technologies and tools to solve business problems. Competitors who underestimate its ability to reframe the market—whether the market is development platforms, collaboration or character mascots—risk ending up on the short end of the stick.

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Intuit Partner Platform: Changing the Rules of Cloud Platforms with Federated Applications

Posted on June 15, 2009 by lauriemccabe

Cloud platforms, or “platforms-as-a-service” (PaaS) are quickly becoming a key channel for application developers. By writing and publishing their applications to integrate with those of a major PaaS provider, such as Salesforce.com or Microsoft, smaller developers can gain instant access to a large installed base of customers.

With so many vendors creating their own clouds, however, it’s easy for software developers to get lost in them—or potentially, locked into in a cloud. After all, it takes a lot of time and effort to write an application that conforms to the requirements of a particular cloud platform. Smaller developers, without extensive resources, have to place their bets carefully, as they may not have the resources to rewrite their applications for different environments when a new or better opportunity arises.

But recently, Intuit unveiled a new capability called “Federated Applications”, which opens up the Intuit Partner Platform to developers that have existing software-as-a-service (SaaS) applications built on other cloud platforms, programming languages or databases. Instead of having to rewrite applications from scratch, developers can use basic XML integration to configure or “federate” their solutions with key integration points, including the user interface, billing, account management and permissions, data and single sign-on to ensure that their solutions integrate with QuickBooks and other solutions on the Intuit Workplace. For example, the partner solutions that Intuit announced at its launch—Expenseware, DimDim, Setster, Rypple and Vertical Response–are built on a wide range of different platforms.

Intuit also provides a wizard to help developers create their pricing plans, and checks each application to ensure that it meets Intuit security and privacy requirements. Once the process is complete, applications are published to the Intuit Workplace, where four million small businesses and their 25 million employees that use QuickBooks can access them.

With its Federated Applications model, and tremendous presence in the small business market, Intuit is poised to change the rules for cloud computing platforms, both for small business developers and customers, as well as rival PaaS vendors. Intuit’s model makes it much easier and faster for developers to leverage existing investments and reach a new market than for PaaS competitors without this capability. In turn, millions of Intuit customers get access to one-stop shopping, account management, connected data, and single sign-on for applications in the Intuit Workplace.

Intuit’s business model represents a dramatic shift from that of the current PaaS gorilla—Salesforce.com. In the Salesforce model, every user of any AppExchange solution must also pay a platform fee to salesforce.com, whether they need to use the Salesforce solution or not—a tax that many small business customers, in particular, are unwilling to pay. In comparison, Intuit charges Workplace developers a percentage fee (typically 14% to 20%, depending on volume) when they sell their solution on the Workplace. In return, developers get a sales channel, platform services, and a friction-free route to Intuit’s large installed base.

By lowering the bar to entry to its platform so significantly, Intuit’s federated approach makes it easy for developers to place a bet on the Intuit Workplace. Intuit customers, meanwhile, can look forward to a flood of new solutions that will work with QuickBooks. At the same time, its more likely that these solutions will be available on other cloud platforms, should the customer decide to move to another accounting solution. Seems like a win-win-win for Intuit, its partners and its customers—and a challenge to PaaS competitors with more proprietary models.

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