Posted by Amy Dugdale on Tue, Oct 28, 2008 @ 12:14 PM
For those of you who know Nick, you realize that he likes to mix things up and keep life interesting (actually, he'd probably say "awesome," instead of interesting). In this vein, he has invited some of his fellow LiveOffice'rs, me included, to guest blog from time to time. My posts will focus more on the business value and economics of SaaS - and occasionally touch upon the media's coverage of SaaS and cloud computing. So here goes Post #1...
Less Cash = More SaaS?
The other morning I was on the elliptical trainer at the gym with the Bloomberg ticker flying across the TV screen in front of me (does anyone besides me think the art of "getting away" is lost even at the gym these days?!). Still sleepy-eyed and operating without my morning caffeine, all I could see was a single red streak of ticker symbols and red downward-pointing arrows. It was clear that this was going to be "another one of those days" - days that have become too much of the norm recently. Working in the SaaS industry, I started thinking about how we may be affected and so I asked myself ...
"Will the economy's demise lead to SaaS's rise?"
Having been in the SaaS business for the last six years, I realize this isn't the first time SaaS is being hailed as the little train that can, while the rest of the technology sector slows (just look at all the software and hardware stalwarts jumping on the SaaS bandwagon - they apparently got the memo from their accountants re: the recurring revenue model). But I also believe things are different for SaaS companies this time around and that this is in fact may be our promotion to the big leagues. The model is more mature, which provides us with a better chance than ever before to make a fair and accurate assessment of SaaS's viability during ...gulp ...a possible recession (or at the very least, a downturn).
What's different about SaaS this time around? The model, and its applicability outside of CRM, is finally gaining credibility within the enterprise and among industry visionaries and pundits alike. Even the national business press is on the SaaS train.
Consider the following:
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Rising media attention for SaaS and cloud computing - especially in the
enterprise IT trades (the toughest audience of all!)
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Plus, SaaS's predictable pricing model is increasingly attractive to cash-strapped companies, who by moving to a service are able to transform their capital expenditures on technology equipment into more balance sheet-friendly operating expenses.
What do you think? Will less cash mean more SaaS?
Posted by Nick Mehta on Mon, Oct 27, 2008 @ 03:21 PM
I know we have become somewhat desensitized to the daily triple-digit losses in the Dow Jones Industrial Average. But in case you have been asleep the past year, it's been pretty bad out there, no matter where "there" is.
As humans, it's natural for us to go through the various stages of grief:
- Denial
- Anger
- Bargaining
- Depression
- Acceptance
I think the first "D" (Denial) was pretty much the last ten years.
We are squarely in "A" (Anger) right now, as far as I can tell from hearing our government officials talk, though I'm guessing the Fed and Treasury Department have fast-forwarded ahead into "B" (Bargaining) with our $700 billion.
The next "D" is the word-that-shall-not-be-spoken right now.
And I'm hoping the second "A" (Acceptance) comes soon!
But we've seen the "Anger" phase before many times. Who's responsible, the public cries? Bring them before us! Let's see the evidence. Pitchforks and torches optional.
From my experience, there is only one truth to these situations. The truth is in our email. Remember the Internet bubble? Frank Quattrone (famous investment banker)'s email to his troops ordering them to "clean up" their data after being informed of a federal inquiry? Henry Blodgett (famous research analyst)'s emails that contradicted the positive ratings he was giving to technology stocks? The crazy messages sent by the Enron folks?
After that crash, a wave of email regulations by the SEC and NASD (now FINRA) forced many individuals involved in the securities business to have their email and other communications archived and reviewed. Indeed, billions of those email and IM messages are captured using our own LiveOffice AdvisorMail. But those rules were confined to the securities industry.
What did this crash teach us? Besides us all learning the intricacies of CMOs, CDOs and CDSs, the world has realized that no market is isolated anymore. Wall Street and Main Street are interconnected, whether they know it or not. From Illinois to Iceland, from ARMs to automobiles, we are all tied together financially. Hence, to find the truth, we will need to look at email and records across industries and across the world.
Case in point: bond rating agencies. These companies were the watchdogs that were supposed to measure and publicize the risk of various debt instruments. These firms were the ones that told us that sub-prime mortgages were low-risk. Ouch.
Recently, email messages from these firms were publicized:
``Let's hope we are all wealthy and retired by the time this house of cards falters,'' one e-mail from an S&P employee said.
And more:
In the September 2007 e-mail made public today, the Moody's employee said that it ``seems to me that we had blinders on and never questioned the information we were given,'' according to the congressional investigators. ``It is our job to think of the worst-case scenarios and model them.''
The e-mail continued: ``Combined, these errors make us look either incompetent at credit analysis, or like we sold our soul to the devil for revenue.''
Seriously?
Or check out this instant message trail related to debt rating to make you even more Angry.
It's interesting because having an email archive helps all sides in these scenarios:
- Less cost for the companies involved. Under the Federal Rules of Civil Procedure, these bond rating companies, like all companies under investigation, would be obligated to produce whatever they have that's reasonably-accessible regardless as to cost or effort. At least they didn't have to go back to backup tapes to get these messages and spend millions of dollars doing it.
- More visibility for the public. Obviously this information will help us untangle and get to the core of how we got here. And getting it quickly means we find the truth faster.
I don't know how all of this will shake out for our economy. I pray and hope like the rest of us. But I do know that when bad things occur, it's good to have evidence around to at least understand what happened and learn from it.
Posted by Nick Mehta on Wed, Oct 22, 2008 @ 02:12 AM
Let me start by saying that I am a huge admirer of Google. They clearly drive much of the thought leadership and innovation in the Internet.
However, even Google can make mistakes and I think they are learning some of the unique challenges of running paid technology for businesses versus free technology for consumers.
Last week, several websites reported significant downtime on Google Apps Premier Edition (gmail's business, paid version):
For the second time in recent months Gmail has suffered a significant outage that left an unknown, but clearly upset, number of users without e-mail. This time the outage appears to have affected primarily Google Apps Premier Edition Gmail users.
Apparently "some users were left without e-mail for over a day" which couldn't have been fun.
And other reports indicate the issues continued into this week:
Google's web-based e-mail service continues to suffer a few hiccups and outages Monday. The service has been spotty ever since a significant outage last week left an untold number of customers without access to e-mail and other Google web services like Calendar and Docs.
I know Google is a great organization and that they'll learn from this. Most of all, I'm sure they are learning how different business email truly is from consumer email.