Friday, August 15, 2008
3 Reasons We're Excited About Office 2.0
Ryan Nichols
Why are we so excited about this year's Office 2.0 conference ?
First is the theme: Enterprise Adoption. Using online tools to "get things done" is a topic that all of us at Appirio have always been passionate about personally-- we run our day-to-day lives on Salesforce and Google Apps, and most of cringe every time we have to install any piece of on-premise software on our laptops. But while the personal value proposition of Office 2.0 solutions is clear, we're still at the early stages of seeing enterprise adoption of these tools. And that is a topic that interests us professionally: there is massive opportunity in accelerating the adoption of these tools in sizeable organizations-- that's the premise on which Appirio was founded.
Second are the sponsors: In addition to the usual suspects (e.g., salesforce.com, Google), you'll see some new faces at this year's conference. Consider Salesforce and Intacct-- two companies not traditionally associated with personal productivity solutions. The fact that they are interested in Office 2.0 is a clue to why this year's theme is enterprise adoption. We've blogged before about the power of bring together solutions for businesses with solutions for business people, and talked about why this is so difficult using on-premise software. Office 2.0 solutions are increasingly being used to achieve the holy grail of enterprise computing-- getting the right information to the right people at the right time to drive the right actions. When the tools that people love to use to get their work done can display business information relevant to the task at hand, the business value proposition of Office 2.0 will be clear. Appirio is excited to help make this happen-- this is why we are proud to be a Silver Sponsor of this year's event.
The final reason we're so excited about this year's Office 2.0 event is the tone with which Ismael throws the entire production together. No paper. No desktop software. Non-traditional pricing. Centered on demos instead of slides. Rapid cycle between idea and execution. Ismael practices what we are all preaching, and the impact is clear-- a fresh, innovative conference.
So meet us there: the people will be fantastic, the content will be compelling, and Appirio will have some exciting news to share. The conference is September 3-5, at the St. Regis Hotel in San Francisco. Sign up here as a guest of Appirio and get $300 off the registration cost.
Labels: appirio, enterprise 2.0, office 2.0, SaaS, Salesforce for Google Apps
Tuesday, July 29, 2008
Cloud Computing: Hummer or Prius?
Ryan Nichols
Last week we noticed a similarity in news headlines from two very different industries - automobiles and software.
In the auto industry, U.S. gas prices remain near all-time highs, and car buyers are nervous about economic conditions. The result is a dramatic shift among buyers to emerging technologies. The market for large SUVs is hurting, while the market for smaller, lighter cars and especially electric hybrids is booming. Domestic automakers are scrambling to retool their existing SUV factories to smaller vehicles, and Toyota is poised to overtake GM as the leading global car maker.
In the technology industry, we face a similar situation. CIOs are certainly nervous about economic times. And the costs of operating traditional, on-premise enterprise software is rising. Buyers are reeling from the recent Oracle and SAP price increases (does this move remind anyone else of OPEC?).
So why is Goldman Sachs telling us that CIOs plan almost no investment in cloud computing in 2009? Isn’t this the equivalent of reacting to a gas price increase by postponing your purchase of a Prius, and driving your Hummer for awhile longer?
Goldman based its findings on a set of survey results which the blogosphere has dissected over the past few days. The common theme is that CIOs don’t get it. Billy Marshall of rPath argues on Sandhill.com that CIOs are often the last to know about investments in new technologies. James Staten at Forrester has a similar take, saying CIOs aren’t the target for cloud computing anyway. Todd Ogasawara at O'Reilly claims CIOs simply don’t understand the value proposition of cloud computing.
While the shortsightedness of some CIOs is a contributing factor, we think that the thought leaders in cloud computing shoulder some of the blame. We all get so excited about the potential of cloud computing that it sometimes sounds futuristic, as if it were like some spaceship that will provide commuter service to the moon, instead of like a reliable Prius, perfect for your daily commute. The name “cloud computing” itself, with its fanciful tones, contributes to this "unreal" perception.
The reality is simple. "Cloud computing" is just a big name for business solutions and IT services that are delivered over the Internet, providing more flexibility and scalability at a dramatically lower cost. This is a proven technology with a clear ROI, especially when deployed with a pragmatic eye towards business impact. In the last 15 years consumer technologies have experienced unparalleled advancements all at a diminishing costs. In the same period, enterprise software (e.g. SAP, Oracle, IBM, Microsoft) have failed to deliver innovation and relied on their own lack of flexibility - i.e. high switching costs - to actually increase the cost for ever diminishing returns.
Appirio's customers include CIOs who understand that uncertain economic conditions, and on-premise software price increases, make 2009 a year to increase investment in cloud computing. We hope and predict that many more will follow suit.
Labels: BusinessModels, CloudComputing, oracle, SAP, Software, Software as a Service
Friday, July 18, 2008
Appirio backed by Sequoia Capital: What changes, what doesn’t.
Chris Barbin
In our first blog post as a Sequoia-backed company (news leaked today, press release coming Monday), we thought we’d answer a question we’ve been asking ourselves: What changes about Appirio? What doesn’t?
We have more to say about what doesn’t change than about what does. Sequoia’s backing is an endorsement of some unconventional core beliefs that we’ve been talking about (and blogging about) for months-- convictions about our market's potential, our business model, and our value proposition that absolutely won't change as a result of this announcement. What will change, however, is what you can expect from Appirio: more partners, more products, more talent, and of course more customer success.
What doesn’t change: Day-to-day life here at Appirio won’t change much. We continue to be focused on making our customers successful, developing innovative product and service offerings, forming deeper relationships with our partners, and finding and empowering great people. But we’re doing these things with new external validation about some of the core beliefs that make Appirio unique:
- Web platforms will enable the creation of important companies. Sequoia thinks big-- they measure success by the % of NASDAQ’s total market cap represented by Sequoia backed companies. We’ve blogged before about why we think web platforms have the potential to disrupt $1 trillion of IT spending—it’s great to have Sequoia’s endorsement of this vision.
- Products and services are complementary when powered by web platforms. Conventional wisdom holds that technology companies need to choose whether they are going to focus on products or services, and that VCs won’t invest in businesses that think professional services are important. We believe that this was true with on-premise software, but that the availability of web platforms makes a truly hybrid business model not only possible, but advantageous in successfully turning innovation into customer success, and customer success into further innovation.
- Focus on customer success matters. Appirio doesn’t have the portfolio of complex patents or the single product “big idea” that venture capitalists typically look for. What we do have is an unique approach and an outstanding team dedicated to making customers successful and driving product innovation in the rapidly growing market for on-demand solutions. This is what Sequoia found unique, and the core of what they are investing in.
What will change: So while it is mostly business as usual here at Appirio, you will notice a couple of changes in how we talk about and grow our business—Sequoia’s backing has empowered us to "think even bigger" about Appirio. While we’ll have a lot more to say about each of these topics over the next couple of months, we wanted to provide some hints of what new to expect from Appirio:
- More Partners: To date Appirio has been very focused on our partnership with Google and Salesforce, and we continue to believe that these two companies offer the most compelling web platforms on the market. But there’s much more to cloud computing than web platforms, and we’re excited to be exploring application and technology partnerships with some of the most innovative and successful companies in these parts of our industry. Stay tuned for more announcements in this area.
- More Products: Appirio’s product portfolio has been tremendously successful to date at introducing companies of all sizes to us and the potential to “connect the cloud.” We want to lower the barriers to trying these solutions, broaden the available market for their deployment, and use them to introduce even more companies to Appirio. At the same time, we’re enhancing our offerings to solve pain points we see at our customers every day, building the type of enterprise-class solutions around which we hope to build a big business.
- More Talent: Appirio has been successful thanks to a team willing to do things well outside their job description to get the job done. Now we’re looking to bring in some outstanding people to focus on what’s going to take our business to the next level: engineers looking to do amazing things with Google and Salesforce, consultants willing to do what it takes to make a customer successful, customer advocates looking to build community around our solutions, and marketing gurus with innovative ideas for how to get the word out about Appirio virally.
Labels: BusinessModels, PaaS, Software as a Service
Wednesday, July 09, 2008
Microsoft to Partners: We Still Don't Get SaaS
Chris Barbin
The on-premise titans trying to transition to on-demand face considerable challenges, well-documented in this blog and elsewhere. One of the most significant mistakes companies make trying to transition is pursuing a "hybrid" strategy. We've watched SAP and Oracle stumble into all sorts of problems trying to seek the middle ground, and now it seems Microsoft wants to join the party. Recently we were invited to listen to Microsoft's new CRM pitch , designed to recruit existing Salesforce.com partners. The pitch centers on a benign-sounding notion, the "power of choice" (see screenshot at left). Microsoft's lack of a choice (on-premise vs. SaaS) is the core issue. Choice when used in the context of technology architecture typically points to a vendor with a conflicted or transitional strategy. They're not quite ready to make the full commitment, so they spread their attention, development, marketing, and operations resources across fundamentally different paradigms.
What is deemed a choice actually represents a company trying to provide two conflicted models. Would you expect the company who sold you a backyard well to be able to offer a water utility? Would you expect the company who sold you a diesel generator to be able to offer you the benefits of a utility company? Nick Carr did a good job exploding the general myth of "choice" as an alternative to "progress" in The Big Switch, where he extends the electricity analogy to the current age of IT technologies.
We recently blogged, and were quoted in eWeek, saying that companies like Microsoft build "physically and emotionally closed solutions." This makes them unable to meet the challenges of tomorrow's enterprises.
A sign of this and that a company doesn't get SaaS is when it positions on-demand as a transition path to on-premise. This usually means:
- They are trying to not completely freak out their sales and management teams with the notion that their SaaS offering will cannibalize their traditional software.
- Their SaaS feature set is way behind their current on-premise product.
- They don't want a customer to think they made the wrong choice in selecting their on-premise product last year.
- They still don't get what SaaS means for their products, sales, operations and culture.
Microsoft was so brazen as to promote a financial incentive for partners who help customers move from on-demand to on-premise. Microsoft evidently considers this customer ripoff to be an "Opportunity for Success" for its partners (see second screenshot).
Again, the analogy to other utilities is useful: if a company tried to sell you the benefits of their electric or water grid as a "transition" to a bigger and better backyard well and generator, you'd have reason to question their commitment and ability to deliver the promised utility.
What could be more illustrative of this than Microsoft's attempts to put thin web front ends on on-premise solutions? Look at the screenshot below. This solution is really nothing more than diesel generator hooked up to a electric grid and pretending to be a utility (although this solution is apparently good enough for some other companies 'committed' to on-demand). At best this type of solutions is a stop gap measure; more likely, it demonstrates a lack of understanding for what is required to deliver SaaS to tomorrow's enterprise.
Labels: Google Apps, Microsoft Exchange, on-demand, oracle, SaaS, SAP