In this issue
Software as a service
Down memory lane...
About 25 years ago I had the job of producing the budgets for Logica Inc in New York. It involved a lot of calculations and reworking and I found that I was able to save a huge amount of time by using a computer bureau. I had to buy a teletype which is a sort of electronic typewriter, a modem and was connected to a large mainframe computer somewhere in the depths of New Jersey where the actual computing was done. They charged by the hour, and I recall the whole exercise cost about $2,000 in connection fees.
The next year I bought a brand new new device by a startup company called Apple. It ran a new piece of software called Visicalc, which was the very first spreadsheet program. The whole exercise was done quicker, it was more flexible and the Apple cost I think around $2,000.
As an aside, the only thing in the original setup you would recognise today was the modem. The teletype and mainframe computer, and for that matter the programming language I used have gone the way of the dodo.
The Apple circa 1980 however was recognisable as a PC. It had a screen, a system unit, and a keyboard. Definitely a PC. Visicalc is long gone of course, but remnants remain in the oddest places. If you hit the '/' key in Excel it puts you in the menu bar. Why? To help those Visicalc users who are used to '/' being the ' 'command' key. If it ever comes up in a pub quiz ...
Total Cost of Ownership
Since then the PC has taken over. In fact PCs became so cheap that it ended up being cheaper to buy 100 PCs than a mainframe with 100 terminals. PC-based systems looked like becoming the norm, however the problem was a thing called 'Total Cost of ownership'. Yes, it has a three letter acronym: TCO.
With 100 PCs, you need a hard-working team of support staff rather than a bored computer operator. If you total up the cost of this over the life of a system the mainframe doesn't come out badly.
The bureau is back
What has this trip down memory lane got to do with Software as a Service (SaaS)? The bureau is back. It has a different name, but the process is recognisable:
- a relatively dumb terminal
- talking to a remove computer complex with data and processing on the service provider's system
Instead of my old teletype we have a PC with a web browser, and instead of the modem, which I think was a blistering 300 bits/second, we have broadband at millions of bits per second.
The coming thing
Gartner Says 25% of New Business Software Will Be Delivered As Software As A Service by 2011. Currently it is 5%. Why the expected growth?
Our old friend cost of ownership comes into it. If you believe the calculations here, for a 30 user Sales, Marketing and Customer Support CRM implementation, the five year cost of SaaS vs In-house is $723k vs $1160k. Can they really work this out to the nearest $1,000? I don't know.
There are however a number of other reasons:
- Functionally these systems often offer more than PC systems;
- Because access is via a web browser, it often gives a big benefit where the work is outsourced or geographically dispersed. For example if you are using an outsourced fulfillment house, they can have access to the same system that you do. This explains the success of salesforce.com which is good if you want to manage a sales force that is on the road.
- Scalability - if your business grows fast there is no limit to the capacity on the central system.
The big objection
The big objection we come up against is the reluctance to store the company data on an external service. However you don't keep your money in a sock! You store it in a bank guarded by professionals. Think of the service as a bank for data. They are looking after your data 24x7 in a protected environment guarded by security professionals.
Your data is safe.
Actually much safer than in a PC under the bookkeeper's desk.
Who are the big players?
Sales force automation and Customer relationship management
Salesforce.com
Info@hand also has quote/order entry module that syncs with Quickbooks
Netsuite (more on them later)
Accounting
The big in-house providers
These are (or will be) releasing online versions of their system
Netsuite
Netsuite stands out from the others in that it is a pure SaaS company, but it not only provides the normal order entry, accounting and stock control, but also covers ecommerce, sales force automation and customer relationship management (CRM).
I have to declare an interest here, as we are working with Netsuite Partner First Hosted Ltd, to offer a Netsuite based-ecommerce site or hybrid site. For example in a recent project we created the catalogue ourselves because the client wanted all sorts of web 2.0 gadgets such as user comments and user submitted videos. However the prices and stock availability are picked up in real time from Netsuite and the shopping cart and back office are all Netsuite. (www.bluw.com)
More information here.
From my blog
Another fake survey
- Do you think this is worthwhile work (Y/N)
- Do you realise we are reliant on donations (Y/N)
- Are you willing to donate (Y/N)
The moment I see one of these so-called surveys any sympathy I might have for the charity goes straight out of the window. These things are dishonest and sorry - I am not interested.
News
The big news is of course the Microsoft takeover bid for Yahoo. I guess the newspapers have this covered so I won't go into detail here.
Actually of more long-term significance is something buried in the tech pages. The Internet root servers are being upgraded to use a thing called IPv6. What does this mean? The growth of the Internet has meant that we have been running out of IP addresses. Like Oil it is a limited resource, and like Oil we are starting to run out. You have to justify every new address now. Unlike Oil there is a solution - IPv6. The number of addresses in this new standard is uber-huge. Every cell phone or for that matter refrigerator can have its own IP address - weyhey.
Yahoo now supports Open ID. This allows you to have a single login between different web sites, and there are various safety features to ensure you can't be fooled into giving your Open ID away to the bad guys. Sign up here http://me.yahoo.com
Now Google, IBM and Verisign have joined the OpenID board.
I have noticed for many years if not decades that when a technology is considered 'hot' suddenly everyone has it - even when they don't. If you know what I mean. So EMC (who make data storage devices) have announced a secure backup platform - "focused on bringing new software-as-a-service offerings to market, powered by EMC," ". Is it really anything to do with SaaS - I wonder. But it validates my theory that SaaS is hot right now.
Second life is cracking down on virtual fraud in their virtual world. The second life economy has been threatened by the collapse of virtual banks.
AP have done a handy review of up and coming video distribution networks. Let's face it YouTube video quality is pretty poor, and there are a number of startups aiming to do much the same sort of thing but at the next quality level.
When Google purchased web analytics company Urchin, it put a lot of effort into what became Google Analytics, but pretty much seem to have ignored the log file analysis piece. At last after many years we have an upgrade.
Next time you take a cab ride, and the driver starts sounding off about some wonderful product, be careful. He may be paid to talk up the product.
Next time you send your PC out to be serviced you might want to remove the more incriminating images. It sounds pretty obvious but a Hong Kong actor sent his PC away with pictures of him in bed with a well known singer. What do you know - they found their way onto the Internet!
China is to relax its Internet controls during the Olympics. See! They are not the control freaks I often portray them as.
Time Warner is debating whether to sell off AOL. Those of us who remember the price they paid for it in the first place have to wonder how bad business decisions really can be; because they will get very little for it.
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