Since the future begins with local engagement/involvement….

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While large organizations are clearly delivering value to the public and private sector it is important that we do not lose site of the importance of small organizations, local governments, and their ability to drive positive changes.  According to census numbers and numbers published by SBA for the United States alone we know that:  

• There are more than 80,000 local governments in the United States.
• There are more than 27.5 million small businesses in the United States (http://www.sba.gov/advo/stats/sbfaq.pdf).

With these numbers in mind I have launched a brand new community, Our Town Talk.  This community will evolve as membership grows, meeting the needs of our members.   

The mission for this community is straightforward and summed up as providing a place for citizens, small business owners, local government employees and politicians to come together and share their thoughts on what is good and what is not so good in their communities.  Over time I would love to see this become a place where citizen 2.0 is standardized and becomes a reality.   

While these goals are worthwhile we will need to be patient and seek to grow this community to the point where a critical mass is achieved.  In the mean-time, note:  

• The community is absolutely FREE.  It is ad-supported and I want to keep it this way to make sure there are no barriers to entry.
• There are three members today.  As I noted, I literally just launched this.
• As new members join I will create areas for the towns they are from.  I expect this to be a very slow growth community and we should be able to keep up.
• If you have  ideas, share them.
• Invite friends and play to see how this can add value to your community.
• I am aggregating job listings  and daily deals from around the web and will continue to add to these to continue to give more value.

If you believe your town needs an easy to use platform stop by and give it a try.  

John  

RightNow Technologies issues the cloud challenge and it is a good start

RightNow announced a new licensing model today, one that is part marketing hype and part true value add.  I applaud them for both efforts and wanted to take a moment to highlight the good, the bad, and where I would like to see this go in the future.  Keep in mind that I am a CTO at a company that offers SAAS services and I have delivered on the SAAS model since the beginning of 2000.  In other words, I understand the challenges of the vendor side as well as of the buyer side.

What is the Cloud Challenge?

RightNow has clearly laid out the cloud challenge on its web site and I would urge you to read through it.  At a high-level, however, it addresses the following problems with SAAS pricing:

• Shelfware.  Too often customers end up buying more product or usage than needed.  For example, a company may need 1500 licenses of a product during peak season but only uses 1000 licenses the rest of the year.  The problem, most vendors will force the buyer to buy 1500 licenses to account for max usage, leaving unused licenses on the shelf during non-peak season.
• Lack of certainty in pricing.  Hidden costs, ever-changing prices, they are the negatives you must be aware of when buying SAAS software. 
• Contracts lock-in.  Want a better deal?  Buy three years of the product and you’ll get a discount.  We’ve all seen this (and yes, have worked at companies that sell this way) .  Lock-in, while great for vendors, leaves customers unable to change vendors when their needs change.

These are real issues with the traditional SAAS licensing model. 

How is RightNow meeting this challenge?

The details are on their site, but the key points are:

• Annual usage alignment up/down (No more shelfware).
• 3 year renewal price cap, 3 year of price caps. RightNow customers will know what they will be paying for the next 6 years.
• Annual termination for convenience.  Customers can walk away annually, no long-term contracts.
• Annual pools of capacity (rollover usage).
• Cash credits if RightNow does not deliver on committed SLAs.

A quick complaint

My one complaint is that the opening and closing videos hammered on the competition: Oracle, Salesforce.com, SAP.  RightNow, if you believe you are delivering real value you do not need to bash the competition.  Differentiate, yes.  RightNow’s CEO, Greg Gianforte, noted, and I paraphrase:

Oracle is the poster child for bad customer relationships.. Not just oracle, its offspring as well… Salesforce.com

Greg, the challenge and licensing model you are promoting stand on their own.  Enough said.

This is good, but…

Great first step, but, if you want to really want to change the world:

• Work to bring other vendors into the game.  This is an undesirable model for most vendors.  As you noted, Enterprise SAAS Software providers will probably go under if they adopt this model.  That means…. drum roll please, that it’s not yet right.  Consider:
  • An independent group made of up buyers and sellers should be created  to hammer out a framework for SAAS pricing.  Ray Wang of the Altimeter group would be a great leader based upon his work with the SAAS Bill of Rights.
  • This group should include major and minor vendors including RightNow, Oracle, Salesforce, SAP, and others.  This group should include a mix of Enterprise and SMB customers.
  • Call me, would love to take part.
  • The pricing framework should make sure vendors and customers win.
• Add a non-negotiation clause to your challenge.  To truly reduce buying cycle time, a noted goal, state prices as they are, no negotiation.
• To support the above, ensure pricing is flexible enough to meet the needs of small and large customers.
• Support the model with a public facing dashboard highlighting the following:
  • If you do not offern a non-negotiation model put your average prices on the dashboard.  If the price is per seat, document your average cost per seat (that customers are paying at that moment) so that your customers will know if they are getting a good deal.
  • Document average amount of shelfware.  In other words, document on the dashboard the number of rollover seat months.
  • Document renewal numbers.  How satisfied are customers with your service?
• Take the shelfware revenue and either give back to your customers or to a charity.

Keep in mind, I like the first step.  However, it is not yet a game changer, more work is needed.  What do others think?

John

Are you ready to release the product?

Checkpoints at key milestones are always important, but never more so than at the end of a project release. The Swimfish team is nearing completion of our Milestone Tracking Matrix product.  The product, which enables users to coordinate their deals efficiently and completely, from due diligence to distribution tracking, to discovering new opportunities, has a complex back-end that is tightly integrated with underlying CRM systems.

For this review meeting it’s critical to have the business owners (Product Manager in our case) as well as the leads for support, development, QA, and documentation in the room.  Here is a summary of some of our checklist items:

• Make sure that everyone is on the same page in terms of what new functionality is being included in the release.  You should not be surprising anyone at this point.
• Review the status of any remaining open bugs.  Do you have any issues remaining?  What is the risk level with fixing, or not fixing, the remaining items?
• Ensure we all understand the status of key pieces of documentation.  In our case this includes release notes, end-user help, and server administration guides.  Are they completed?  Who has reviewed them?
• What is our customer notification plan?  Our software runs in our SAAS environment and on-premise.  Ensure your plan delivers the right message to each audience.

These were some of the key points we covered today.  How does this compare to your end of release meetings?

John
On Twitter at JohnFMoore

Using SAAS does not eliminate the need for business oversight

I do a lot of reading and today I came across this article compairing SAAS to outsourcing. While I agree with the author on some of his points I felt that he painted SAAS with too broad a brush stroke.

Here is my response to the article:

“Your article raises some excellent points but it also paints SAAS with too broad a brush stroke. The majority of Enterprise-class SAAS providers:

• Run their applications and store their data in SAS 70 compliant data centers.
• When their applications are for markets that have regulatory oversight (like HIPAA as an example) they are well-versed in the issues.
• Data is secured properly using multiple levels of firewalls, IDS/IPSs, etc..

With that said there are plenty of smaller SAAS solutions that do not meet these requirements. Business and technology owners must never give up their responsibilities to perform proper due diligence, however. Doing so is not only foolish but it is irresponsible.”

What do you think?

John

Unless you work at AIG, it’s time to reduce your costs by considering a reduction to your IT team.

We all know the economy is terrible and not everyone is making hundreds of thousands of dollars in bonuses.  You need to be driving innovation, helping the business find new sources of revenue, and continue to reduce costs.  Not only that, you only have 168 hours per week to get it all done. 

One place that you can probably reduce operational cost, while improving overall focus on the business, is on your IT budget.  While this post is mainly focused on non-tech companies, even they can learn a thing or two.  This sounds painful, I know, and it is.  However, downturns like this often lead to more innovation, this one will be no different. 

Before I continue, if you are looking for a new job consider reading this post on what you should be doing while you’re looking for your next IT job.

You are constantly hearing about SAAS, outsourcing, offshoring, nearshoring, and other popular buzzwards of the day.  In simple turns, you need to decide what you want to manage on premise versus what you are comfortable having managed outside of your building.  There are also models where hardware runs within your building and is managed by outside resources (we offer that as one alternative solution for our customers).  You need to manage cost vs. quality of service vs. risk.  Here goes:

• E-Mail.    For most companies that are smaller than 100 employees I would argue you should outsource your e-mail.  Managing backups, account setup and shutdowns, SPAM filtering, etc.., is  a job best left to the professionals.
  • If you’re in a company of fewer than 10 employees and need simple mail and calendaring I’d argue you should just use gmail.
  • If you’re in an industry that is regulated by HIPAA, SOX or some other law/regulation think carefully before you outsource this function.  If you find a provider that truly understands these requirements you will be okay, but be careful.  There is too much risk associated with going with the wrong provider.
• Document management, workflow, training.  Whether you are discussing SharePoint or your favorite LMS you are usually better off partnering with a knowledgable hosting provider.  They can manage the storage and bandwidth costs and offload the management of these systems so that you do not have to invest in hiring expensive resources to manage these solutions.
• CRM Systems.  You need to consider the data you are putting into your CRM system to make the right call here.  Some guidelines I would suggest include:
  • Is your CRM system really just a contact management system?  Outsource it.
  • Is your CRM system storing sensitive relationship or financial data?  Either keep the solution in house and do it right (expensive personal to manage the system and keep your data clean) or outsource to a SAAS provider who is not architected using the traditional multi-tenant approach. 
    • Let me explain my point on multi-tenant solutions.  They are scalable and you gain cost efficiencies in terms of the overall management of the system.  However, you also have greater risk to your data because it resides within the same systems that are storing data for other customers. Find out if your potential providers can give you dedicated environments (either virtualized or on physical hardware).
• Phones and faxes.  If you have fewer than 50 employees I would consider a VOIP provider like Teliax and a PBX like Fonality over a traditional telco.  The technologies have evolved to a point where the quality of service is excellent.

I could write for another hour and fail to fully cover this topic.  However, I hope this provides you with plenty to consider as you’re looking for new ways of reducing your costs.

Let me know what you think.

John