I remember the days where Internet Explorer was 97% of the used browsers. Right – that was after the time where Netscape was 90% and IE was 5%. But if I look at my stats today IE is down to 62%, Firefox is 23% and – check this out Opera is 10%; others 5%.

Now a related dynamic: new Web 2.0 products like AjaxSketch or AjaxWrite are only available for Firefox. Isn’t it a bold move to develop something and ignore the dominate technology? Well there is stuff out there that is simply not possible in IE.

Talking about Web 2.0. I found a great chart at oreilly’s site, explaining Web 2.0 versus Web 1.0:

Web 1.0 Web 2.0
DoubleClick –> Google AdSense
Ofoto –> Flickr
Akamai –> BitTorrent
mp3.com –> Napster
Britannica Online –> Wikipedia
personal websites –> blogging
evite –> upcoming.org and EVDB
domain name speculation –> search engine optimization
page views –> cost per click
screen scraping –> web services
publishing –> participation
content management systems –> wikis
directories (taxonomy) –> tagging (“folksonomy”)
stickiness –> syndication

Also checkout TechCrunch.com it’s a great site to be up-to-date with Web 2.0

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One of the innovations I was working on the last few years was a better way of getting sales leads to resellers. Rather than pushing them out and hoping somebody will follow up, I developed a pull methodology where Partners can pull them from a pool to make sure that the lead will have a follow up. Several rules, a well thought out process flow and an automatic tracking made it work. I applied for a patent which was awarded patent number 09,514,997 by the United States Patent and Trademark Office last week.

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Many people think about OpenSource and where it goes and so do I. One comment stroke me in particular at one of the recent conferences where somebody stated that OpenSource is good for lot of things but there is no TRUE innovation. “OpenSource projects today are pretty much improving what others did before – but there is neither a new technology, no new methodology and no truly new functionality”.

Past 10 years OpenSource
In the past 10 years OpenSource has come a loooooong way. But still people are not sure about the relevance for the business and how opensource engagements can fuel the industry other than how it does today. The fundamental issue – it seams – is the reward system. Clearly it is rewarding to see how software evolves. There is a reward for contributing by using code others contributed and there is a reward by recognizing increase in quality through the respective contribution of all kinds of expertise. But like one developer stated “I love it but it doesn’t feed my kids”.

OpenSource and SaaS
With Software as a Service a new question pops: How do you deal with OpenSource distribution license when there is nothing to distribute – other than the service over the net? Will OpenSource dry out when no code is distributed any more?

Rewarding Contribution
Let me contract the above issues all together and think:
— How about bringing opensource developer together to contribute to innovative and new projects that will be delivered over the net, regardless of the fact that there is only one instance of the code?
— How about a reward system that includes some monetary opportunity by incorporating the contributors into the success?
— How about creating an OpenSource Contributor Option Plan that gives out shares of the respective company for those contributors who truly contributed to the success of that company?
This is not a cash reward like with an employee but rewarding contribution to innovation. Would’nt that be one further step towards individuality where at some point in time a company is really a “company of people” with their respective contributors participation in the success – still maintaining the fundamental concept of capitalism? I will work on that idea further and I am really interested to know what you and others think. Feel free to comment and let me know.

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Lot’s of discussions around the technology model (single tenant, multi tenant, hybrid model). Some say only a multi tenant architecture is a real SaaS play. I’d like to challenge all of us (at least the technologists) with some thoughts:

Let’s look at today’s multi tenant architecture. The easiest way to do that is to check out the Salesforce.com literature which exposes the architecture for developers. What we find is a data model with the traditional hierarchy of an account, organizational structure and users. We find objects such as leads, opportunities, cases, documents etc. and we find some basic processes to manage those objects based on certain criteria or events. Every new tenant is bound to this architecture (which is well thought out) and is therefore able to use the application very quickly. All it takes is an underlying or overarching model that allows every tenant to use the model in some variations, add custom data fields etc. without interfering with other tenants. Salesforce.com demonstrated that it works, is pretty secure and flexible enough to have many companies using the application and still have some freedom for customization. So far so good. As long as we continue to think in our boxed world (our companies’ 4 walls) that is all fine.

Now – outside this box: It’s no longer just the company but there are partners who deal with us, and also with other companies. There are suppliers who provide us with additional material, resources and other services. And oh – there is this thing called “customer”, in case you forgot – it is the entity that pays the bills (mostly). Customers deal with us, with our partners and of course also with other companies and competitors. And here is the challanging question: What role is the customer playing in this new multi tenant architecture based SaaS model? Today: None!

How will we integrate partners, customers and other constituencies into a meaningful information and process flow? It’s not a question of whether we will do it or not – but how and when. Multi tenancy still works inside the box – for one corporate entity. But as soon as multiple legally independent entities need to collaborate, we’ll hit the wall. Yes, we can use SOA, WDDX, XML and what have you, but we are back to square one – like in the previous stage of software we relay on interfaces, APIs and the big hope that it’ll work together. Of course it is much easier but still time consuming and risky. Architecturally Multi Tenant Architecture is a very economic model to drive efficiency and I don’t want to belittle it in any way – it is a major step forward yet we need a new model.

Rather than thinking from the inside out we have to begin thinking outside in. We will need to make it MUCH easier for customers to interact with companies and for partners to do business with their vendors and their customers. Suppliers need to be able to collaborate with all sort of customers without the need to interface all those applications with each other. CommerceOne failed by trying and others didn’t even get there. People asked me whether Tanooma will build interfaces to connect all the SaaS players. The answer is “no”. 400 vendors today – 2,000 in may be 2 years from now. And even if we would, it would still be an “internal vendor play” – it would still only represent the old way of thinking in integrations. So to build interfaces with all those companies would be the wrong approach. We all need to elevate ourselves and our respective technology to a higher model where we think and more importantly ACT outside our 4 walls. The challenge is to move from or skip a multi tenant architecture and develop a truly networked interaction model where tenants are no more an encapsulated entity but an organism like cell that is able to seamlessly interact with others: customers, partners, suppliers and must importantly: we need to begin thinking of the “user” not the “account”.

Creating this new model – or architecture may go beyond what a single company can do. It may be an “open mind project” (like opensource). It may even require cross technological expertise that goes beyond the knowledge of our own industry. I decided to start this in the next few days.

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The SaaS Summit in Napa Valley this past week was a very interesting and well organized event by OpSource. I’m sure Amy Wohl and others will cover it and you may also want to read http://boassobusiness.blogspot.com/. Rather than providing redundant viewpoints, I’d like to comment on 1 particular topic: I call it

“The Enterprise Software Chasm”
Tien Tzou from Salesforce.com made a very clear statement about the On Demand world and the death of the enterprise software sales model. He said, and pretty much everybody nodded their head agreeing that this new world is a “Google World” – an inbound world where inside sales people are the heroes and the traditional and very expensive direct sales model is vanishing away. VCs in a later podiums discussion at the same conference agreed and pointed to the successes in the SaaS world with short sales cycles and large number of users. The traditional enterprise sales model with their traditional long sales cycles is something investors would no longer accept.

Future software investments go into those companies who build a product, bring it to the market and if people pick up on it – this is considered success. No more outgoing sales and definitely no long sales cycles. If you need to mess around with a customer for several weeks – stop it and find customers who buy it because they like it. Well, a very logical and from an investors point of view very economical strategy.

This, and previous discussions with various investors lead me to believe that there are only 2 companies on the planet that will continue to invest in the enterprise software model: SAP and Oracle. That also tells me that with no other engagements and investments, SaaS for the enterprise market is at least 5 years out – enough time for both SAP and ORACLE to reengineer their respective companies and make them ready for a SaaS oriented enterprise business. New innovations for enterprise software will therefore not be seen on the market before 2012. Since 2003 almost nobody invested in enterprise software anymore – despite the fact that enterprises still exist (and I’m sure we do not expect enterprises to go away any soon – but read on). This development will create a big chasm between enterprises and smaller more agile companies who will be able to use latest Information Management tools (on demand and omnipresent). The SMB part of the world may actually catch up more than normal simply because of tools, systems and methodologies which are not available for a complex enterprise.

The point I’d like to make is that this interesting development may change the face of our business society in a rather unexpected way. It is not because the technology couldn’t be available – it is because there is no investor who is interested in an enterprise play, dealing with the fact that enterprises have different needs to modernize their business and need people who have the patience to work with 10 different departments at the same time and analyze business impact of a software that may be run within a 20 Billion $ company and be used by 20,000 people in very different capacities. This has nothing to do with “stubborn and old sales guys who can not adopt”, it also has nothing to do with “IT old timers” who are unable to take on new technology. It is about the complexity of an enterprise and in order to reduce complexity for the users and increase simplicity of processes – the tools to make it happen will most likely become even more complex – and at least right now nobody want to invest in it.

SaaS is becoming a demarcation of a growing chasm between enterprise software and any other software.

Regardless of the reasoning – the SMB market has an unparalleled opportunity to grow and compete with the dinosaurs. I use the word dinosaur not as an often used term for something old – but to draw a parallel to evolution where larger and more complex beings were replaced by smaller, highly agile and flexible ones. If a company spends $20 Million every year on IT in order to run it and customizes those solutions so far that it is no more economical to update, did that company reach a point that sheer size made it less competitive? Is it a point even so operations and production is highly optimized, the brain of that entity is no longer capable to evolve any further? Is the Enterprise Software Chasm an early warning indicator that super complex global enterprises after decades of mass consolidation by acquisition are in great danger? Did the gigantic acquisitions in the Automobile Industry here in the USA that ended by having only 2 massive and barely profitable companies left over, proven to be a mistake? The reason for the car industry consolidation was the believe that so many car manufacturers have no chance to survive because they don’t have the critical mass. Today we have more car manufacturers on the planet than 1950 – and today there are percentage wise way less US cars in the country than 1950. Porsche is one of the smallest car manufacturers on earth – yet one of the most profitable.

The Enterprise Software Chasm can not be crossed for quite some time. I wonder what dynamics and evolutionary effects it will have on the SMB space – and the “Porsches” of the other industries.

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