The Service Economy

2006 may become the most important year for the Software as a Service industry. I recently heard people talk about “Hardware as a Service”. Wouldn’t it be cool to get a washing mashine in a HaaS (Hardware as a Service) model? We enter an annual contract and pay $25 per month. If it breaks, it will be replaced, if a new model comes out we’ll get it. And how about our $20,000 home theater for $690 per month? If we wan’t a bigger and better one – no problem! And may be our….

Seriously – our economy will change. Leasing and full service leasing will morph to Hardware as a Service as Software as a Service makes further progress. It will be an exciting yet very challanging development for most of us.

Pioneering Software as a Service

When I initiated the development for a first “software service” based application in 1997 using ColdFusion 1.5, I had no idea of the development of this industry. It was just ment to interact with our 4,000 resellers in 20 countries and client/server software was obviously not the right way to go.

In 2001 I founded BlueRoads, one of the early Software as a Service companies and the first with an enterprise class architecture in mind. The company experienced great success, grew in market awareness, customerbase and usage. Many other Software as a Service companies where founded in the meantime. I watch over 200 today.

Now – I’m working with some very interesting people (also SaaS pioneers) on a next generation Software as a Service solution and will continue to help this new business to grow fast.

Development requires change

Change is probably the only constant in our universe. I truly enjoyed my 4 years at BR and especially the personal relationships I developed. Now I decided this is a good time for me to transition to the next phase of my life. I look forward to seeing BR achieve great success!

With Software as a Service gaining great momentum, our industry is changing radically. As Microsoft is joining the market with Dynamics CRM 3.0, the SaaS World will not only develop further but that development will accelerate. The top 6 SaaS CRM Players today in accordance to Forrester Research: Salesforce.com, Siebel CRM OnDemand, RightNow, BlueRoads, NetSuite and Salesnet are leading the trend.

As one of the pioneers of the SaaS industry I see the biggest change not because of the new technology or delivery model, but the explosive usage. While CRM was an elite software for the Fortune 5,000 now 10 Million US or 65 Million world wide business can afford to better manage their customers. ERP is no longer a solution for the Fortune 500 but 10 Million world wide producers of any goods. Software as a Service will bring more change to our industry than PC software did when IBM and Microsoft introduced their solutions in 1982 and disrupted the Mini and Mainframe world. Roughly a billion PCs will use Software as a Service in the next 10 years one way or the other, partly or solely. This development requires massive change in the way we think about software.

Enterprise Software is dead – long live the enterprise

We hear it all over the place – the enterprise software market is dead. With two players left: Oracle and SAP, nobody will want to compete with them. So, bad times for enterprises, if you don’t want to choose between those two. Well – there is a new world how ever: OnDemand Software Service (OSS) or “Software as a Service” (SaaS). Is it like the 70’s where IBM, Bull, DEC, Amdahl… ruled the world until the PC came out?

SaaS for the enterprise is on it’s way – simply because enterprise users like anybody else want the simplicity, the fresh way of how developers look at software, the ease of update, functionality selection and also the omni presence of such software. And as the enterprise doesn’t go away Enterprise Software will be redefined.

SaaS for the Enterprise means that application structures, security requirements, integration aspects and interaction model need to be taken care of. BlueRoads for instance was the first company working on those questions. “APN” the Active Participation Network Architecture was the first step to answer questions around structure and architecture. The VSI Technology (Virtual Single Instance) was a first step to answer the security requirements. APN enabled APIs was the first step to think of large scale integration technologies. And the “Zero Training UI” was answering the user interaction model questions. At least there is a beginning.

Leading by innovation

BlueRoads achievements so far:
– Attracted a top executive team who in turn hired an exceptional team under them
– Successfully raised 3 rounds of funding, in rather tough times.
– Delivered a robust and very highly regarded product suite
– Received a lot of respect from customers, analysts including Gartner, partners and other players in the market
– Grew one of the most attractive venture backed SaaS companies
– Introduced a company culture of engagement, openness, team spirit and respect
– Delivered quarter over quarter growth in bookings and about 100% growth year over year with a shoe string budget
– Grew subscriber base (number of partner companies) from about 120 in 2003 to 1,000 in 2004 to 12,000 in 2005.
– Won blue chip customers including Avaya, CheckPoint, Hitachi, HP, Juniper, Nortel and others
– Engaged in technology partnerships with companies like Salesforce.com and Webex
– Maintained consistent vision and strategy
– Introduced disrupting innovations for lead management, deal registration and contract renewal management
– Managed to compete successfully against Siebel and other enterprise class software players
– Managed to win 65% of all channel management deals in the high tech industry in the last 2 years
– Lead the company against major competition to the #1 position in Channel CRM

Anmd the year is not over!

Executive Blogging

Currently about 100,000 blogs are created every day in accordance to a recent article in Forbes. Yet it still feels like something for freaky insiders. But that may change soon.

Executive Blogging (as I call it) may soon be a preferred way for executives to stay in touch with their community of customers, prospects, investors, partners, opinion leaders and the rest of the industry. Rather then sending out mass e-mails, hoping it hits the right people, the people who are interested to find out about the respective company or their leaders and people may watch the corresponding blogs.

That is how I want to use it. I will try to post updates and latest development. Even so people may fear openness as a competitive disadvantage – I believe openness is a sign of strength and maturity. BlueRoads is a fast growing and very innovative company, way ahead of any competition. I’m fine letting the industry know what and how we are doing.

Executive Blogging may become a new discipline in investor relationship and market communication. There will be a lot to learn and to experiment. In particular public company leaders will need to be very careful to stay within the legal and ethic boundaries of public statements – so let’s see how we can leverage Executive Blogging to the benefit of people who want to be informed and those who are ready to keep an instant open dialog. I’m happy to be one of the pioneers.

Innovation: Software as a Service

Software as a Service is one of those innovations (see my post below). It wasn’t meant to be a better way of delivering software. The SaaS movement is about a whole new information technology experience. Some other interesting insight can be read at Sam’s blog, one of the Microsoft people who are driving SaaS. I met Sam at a recent SaaS meeting, hosted by Microsoft with other executives from BeVocal, Blue Roads, Echopass, Ellie Mae, Five9, Intacct, Newsgator and OpSource. Clearly all of us, the early pioneers of the SaaS World, will help shape this new industry segment to a whole new dimension of software innovation.