Salesforce.com and Deloitte Consulting Ally

The companies forge a strategic alliance that may bolster Salesforce.com's efforts to add more enterprise-size organizations to its client roster.

by Coreen Bailor

Salesforce.com is pairing with Deloitte Consulting in a strategic alliance that may enhance the on-demand CRM giant's ability to further penetrate into larger organizations. As part of the alliance, revealed on Tuesday, Deloitte will incorporate Salesforce.com's on-demand CRM apps and the Apex on-demand platform into its consulting services.

Salesforce.com's alliance with Deloitte will help give enterprises the confidence they need to develop, customize, integrate, and deploy on-demand applications with consultants that can help them address their global requirements, according to Bobby Napiltonia, senior vice president of worldwide channels and alliances at Salesforce.com. "The largest enterprise businesses worldwide are realizing they too can take part in on-demand success," he said in a written statement. "With Salesforce Winter '07 and the Apex on-demand platform, companies are able to extend the benefits of on-demand applications to any part of the enterprise."

"Salesforce.com's on-demand model can help change the way large organizations approach their customers," said Paul Clemmons, Deloitte Consulting principal and emerging solutions leader, in a written statement. "We look forward to working even more closely with Salesforce.com to help our clients in their efforts to realize significant results from their on demand applications. The Salesforce.com Apex on-demand platform represents an opportunity to expand the benefits of on-demand computing across many facets of an enterprise."

The announcement dovetails with the findings of a study unveiled today by Nucleus Research and KnowledgeStorm, a search resource for tech solutions and information. More than half of the 198 organizations surveyed use on-demand solutions, and nearly two-thirds plan on implementing an on-demand offering in the next year, according to the study. "This survey shows that the on-demand model is beginning to outgrow its image as a small business solution that, while cost-effective, couldn't scale reliably," Jeff Ramminger, executive vice president of KnowledgeStorm, said in a written statement. "Now, companies of all sizes can take advantage of the efficiencies of these types of solutions."

Salesforce.com has been trying to move up-market for a while, says Timothy Hickernell, associate senior analyst at Info-Tech Research Group. "At some point in this process, software vendors do need to have credible system integration partnerships to get their foot in the door of large firms. The key will be to see how many resources Deloitte--and other SIs--ultimately put towards this partnership, such as full-time consultants trained and certified on Salesforce.com's technology."

Online accounting application FREE for Australian start-ups and small businesses

NETapplica launches FREE version of its fully featured SaaS (software-as-a-service) accounting application

by Sqware Peg

(SYDNEY, Australia) 31 January 2007 – NETapplica, Australia’s leading On-Demand applications company, today announced the release of a free version of their popular online accounting application for Australian start-ups and small businesses.

NETapplica provides businesses with an online accounting application called ‘NETaccounts’ (
www.netaccounts.com.au) which manages their critical accounting, business and contact information.

The free version of NETaccounts is a fully featured application that provides users with up to 10 transactions per month, which is ideal for start-ups and light-usage small businesses. For larger businesses, NETaccounts is delivered via a monthly subscription starting at $15 per month where tax table updates, online support, feature upgrades, inventory and payroll modules are all provided.

NETapplica is providing free access for accountants and bookkeepers to their customers’ NETaccounts files in order to support the industries migration to “online applications” from “offline software”.

NETapplica is also catering to the growing developer community by providing their Web Service Application Programming Interface (API) at no cost effective immediately.

“We are very excited about making our online accounting application freely available to start-ups and small businesses. By offering our application for free, we are aiming to provide nurture capital in the form of free access to help them grow into larger paying customers. We are helping to save them critical capital expenses when they are just getting started.” said Marc Lehmann, CEO of NETapplica.

Access to the NETaccounts single transaction application means that all invoices, inventory, payrolls, imports, contacts and Business Activity Statements (BAS) can be managed within the one framework, saving time and the ongoing costs of software installations and upgrades which are typically associated with traditional accounting software. With security encryption and compatibility for both Windows and Macintosh operating systems, businesses can access their accounts online anytime, anywhere.

NETapplica also provides a free data importing service for all customers, whether you are switching accounting software packages or just needing your opening balances imported. Some conditions apply.

“As a small business offering financial analytics and advisory services, we needed a high performance accounting solution to keep our data in sync and to streamline our backend cost effectively”, said Stephen Bell, Principal Financial Strategist at Logiro.

“By reliably integrating our accounting, business and contact operations with NETaccounts, we shortened response time to our customers and improved overall customer satisfaction,” he added.

To signup for your FREE version or for more information, visit
www.netaccounts.com.au or call 1300 360 733

About NETapplica
NETapplica is Australia’s leading On-Demand applications company. NETapplica offers an online accounting application called ‘NETaccounts’ which assists businesses manage their critical accounting, business, account and contact information. For more information please see
www.netaccounts.com.au and www.netapplica.com


From Crayons to Calculators

The transition marketers have had to make--from creative souls to metrics mavens--has occurred quickly over a relatively short period of time. Here, a brief on recent developments and some tips for remaining competitive.

by Jessica Sebor

More of an art, less of a science has been a popular way to describe the marketing world's behaviors. That world is undergoing a sea change now, and marketers have had to put down their crayons and pick up calculators. The reasons? Finance departments breathe down their necks; accountability restrictions bind them to measurement software; demand for real numbers piles on from all sides. With industry sands shifting under their feet, how are marketers staying competitive?

The advent of high-speed Internet has probably been the greatest impetus for the changes marketers have experienced. Broadband penetration in U.S. households was at 5.5 percent in 2000, but this percentage has surged to almost 50 percent. The increase in broadband adoption has led to exponential growth in online consumer value: More people are making more buying decisions and purchases online, leaving marketers scrambling for new, innovative ways to catch customers' eyes and measure campaign success. The Web has contributed heavily to the demand for hard numbers as customer behavior is much more easy to quantify online than offline. Items like blogs, wikis, search engine optimization, social networking sites, and pay per click advertising did not exist 10 years ago, but now must become integrated into a marketer's lexicon and awareness. Liz Roche, managing partner at Customers Incorporated, says the most important thing for today's marketer to understand is that "the 'Web experiment' has succeeded and the Internet as a commercial tool is here to stay."

Suaad Sait, CEO of ReachForce, a provider of on-demand marketing automation products, began his career in marketing. "I used to be frustrated early on," he says. "I'd talk about wanting to quantify marketing spend and people looked at me like I had two heads." Just a few years later Sait moved to a different company and considerations had already begun to shift toward the ROI bent he had long been looking for. "The first day of the quarter the vice president of sales sat right next to me, and the last day of the quarter the CFO sat next to me."

Sait's experience is indicative of many marketers' journey in the past decade. It is understandable that marketers are still enduring growing pains associated with the changes in relationships between marketing and other departments. New technologies have allowed some departments to work more closely together, while restrictions have caused others to start exchanging dirty looks at the water cooler. With analytics stressed and technology growing, it is, understandably, IT, sales, and finance that have been doing the most severe relationship reevaluation. The explosion of online opportunities and new compliance responsibilities like Sarbanes-Oxley--the poster child for accountability pressures--are also factors that have helped to kick up some serious dirt on marketing's turf.

Another wrinkle for marketers these days is the plethora of recently coined terms that they must not only recognize, but also understand on a deep level to properly leverage. Sait says that language in marketing has changed so much that 10 years ago, "it would be the equivalent of me speaking Mandarin Chinese in Maintown, U.S.A." Today, marketers must get their heads around new terms, such as predictive analytics, search engine optimization, and social computing, in order to stay fluent (see the sidebar, "The Top 6 Terms for Marketers to Know Now").

Get It?

New pressures and advanced technologies have led to many shake-ups. A Forrester study released in October 2006 found that three of four firms have reorganized their marketing departments in the past two years. Creative marketing through broadcast TV, billboards, newspapers, and direct mail isn't on its deathbed, but with the explosion of Web technology and analytical tools, a marketer now needs a different bag of tricks than she did five years ago. To cope with the advent of new, mandatory skills, some companies have created separate e-marketing departments; most analysts agree, however, that this move is counterproductive. "Organizations must begin to regard the Web as just another channel in the channel mix, as opposed to treating it as a separate business unit, operating company, or division," Roche says. A separate department is not only costly, but can lead to a breakdown in brand identification and message cohesiveness. Sait argues that a company that treats e-marketing as a separate function within the organization would be "a good indication of someone who doesn't get it."


According to Peter Kim, a senior analyst at Forrester Research, in recent years it is marketing's relationship with IT that has become the most tenuous. Kim's recent "Reinventing the Marketing Organization" study found that only a little more than 60 percent of marketing executives felt that their relationship with IT was either somewhat or highly productive--a number far lower than that of any other department. Kim explains that for IT, "technology has moved too fast away from the traditional world of ERP and enterprise software," and says that as IT tries to support internal technologies, marketers are left without support for the new online consumer connections.

Kim believes that marketing and IT must try to build a trusting relationship so that marketing can focus on marketing instead of scrambling to support its new technology, but on the flip side emerging technologies are making it easier for marketers to bypass the IT department almost completely. SaaS has enabled companies to implement systems quickly and easily, cutting out the middleman. Pam O'Neal, director of marketing communications at NetQuos, says that her company uses exclusively hosted solutions so that its marketing department may "make Web changes in an instant." She is able to maintain a strictly metrics-based focus without relying on a separate department to help her get the technology to deliver these numbers. Kim does not believe this to be the best approach for enterprise companies, but he recognizes that it has become easier for marketers to skip over IT, noting that many look to expense applications so that they won't have to deal with the other department.

Sales Buddies

Not even a decade ago, sales and marketing were miles apart. Sait remembers when his marketing department would go to an event to find prospects: "We'd come back and celebrate with champagne, because we had a thousand leads and then we'd just throw them over the wall to sales." Today, Sait reports, this model is dead. Because the true return from marketing investments can only be seen through total purchase, sales and marketing need to work together for marketing to appropriately assess its campaigns. Many midsize companies have a chief sales and marketing officer to better facilitate this integration. For larger enterprises where this level of responsibility is impossible or impractical, communication between the CSO and the CMO must be constant, facilitated by collaborative technologies.

Although marketing automation technologies in the past made it easier for sales and marketing to function separately, the new wave of advanced analytics apps, such as those from SAS, is aligning the two departments. "I'm seeing a lot more tools cropping up around analytics and less around automating processes," says Rob Bois, a research director at AMR. According to Bois, processes have become as automated as possible, but now are becoming more intelligent. Tools allow marketers not only to find the best way to create a general demand for a product, but also to go farther in shaping a demand for a specific product. Because sales sells to the demand that marketing promotes, the two must, then, use the same data, the same tools, and work on the same page. Bois says that because marketing is able to deliver better data to sales, sales "is recognizing a new value out of the marketing department that it didn't have before."

Finance Frienemies

NetQuos's O'Neal remembers a time when she, as the head of her marketing department, could have told her CFO: "I need $50,000 to do this." Now, she says, "He would just look at you and laugh." Increased accountability has forced marketing executives to come up with a clear picture of what was once a black hole of corporate investment. Solid investment must be based on solid data. Although this can create tension between marketers looking to create innovative but expensive campaigns, O'Neal contends that the new constraints have made the relationship less fraught. As long as a marketer can prove the need for the investment, "it's easier to spend money," she says.

The relationships between marketers and their other-department colleagues are changing, but the trend is toward cohesiveness, not separation. As marketing becomes more numbers-based and tech-driven, the line between where marketers' responsibilities stop and financial engineers, sales reps, or IT directors' kick in becomes more blurred. Any kind of promotion or activity that goes through marketing must touch every group involved. The same is true for the most important relationship marketers have--the one with the customer.

Customer Consciousness

With the advent of wikis, blogs, and online search, the customer has a tighter grip on a product's reins than ever. Never before has it been so easy for customers to change the public perception of a company. (Think of the now infamous posting of a live conversation between customer Vincent Ferrari and an AOL CSR in June 2006.) Marketers must be highly aware of this customer power, and must take care to solidify and maintain excellent customer relationships. An example of what not to do: When a customer calls with a service request it is not a good time to use direct marketing. Ferrari did not wish to receive a sales pitch on AOL while he was trying to cancel his subscription.

According to Forrester's Kim, marketing's ultimate job and a marketer's primary role is handling the company-customer relationship. "When you think about what marketing is responsible for, it's the customer. There's nothing more important to a company. A company can't be customer-centric until it has a CMO at the executive level." It is at the customer level where all relationships in a company converge and where the metrics marketers now rely on must be put to best use. O'Neal knows from her own experience that the relationship between customers and marketing today does not hinge on the attraction of flashy ads and sleek designs, but on trust, knowledge, and communication. Her bottom line? "It's no longer Malibu Barbie. It's no longer, 'I hate math.' We've got to be far more process-driven. We've got to be customer focused."

The Top 6 Terms for Marketers to Know Now

Affiliate marketing
A method of promoting Web business in which a merchant rewards one or more affiliates with a commission for increasing clicks, subscribers, leads, or sales.

Consumer value
The expected or perceived value of a customer, minus the perceived value of investment. Value does not necessarily equate to how much the customer purchases, but can mean how much a customer gives back in other ways, such as blogging or through loyalty.

Predictive analytics
The forecasting of a future likelihood of an event or trend. In predictive modeling data is leveraged to create a statistical model that can predict customer behavior or profit, for example. SPSS, Fair Isaac, and SAS are three vendors that have developed predictive modeling tools.

Search engine optimization
Finessing a Web site through choosing appropriate key words and altering pages and links to improve visibility and rank through organic (nonpaid) search.

Social computing
The use of social software that supports social networking and communication. This term covers email, instant messaging, blogging, and social networking (MySpace and Facebook, for example). Social computing can act as an environment for a company to forge customer relationships or for customers to have a forum to discuss a company's products and services.

Return on investment
Profits created that surpass the initial investment, calculated to present net value, shown (most often) as a percentage of the initial investment. (Many analysts believe that it is misused in marketing.) --J.S.

Mobile Marketing: A Balancing Act

A new report finds that as advertisers' interest in mobile marketing increases, carriers must find a way to increase mobile advertising while keeping customer trust.

by Jessica Sebor

When it comes to mobile marketing, the number of fish in the sea is disproportionate to the size of the net being used to catch them. Jupiter Research finds that although cell phones today have a 76 percent penetration rate, only 22 percent of online advertisers are currently developing and deploying mobile marketing campaigns. A new study from Jupiter, "Mobile Marketing: The Carrier's Path to the Pot of Gold," finds that marketers and mobile carriers stand to benefit from an increase in SMS campaigns, digital advertising, and short code response. Jupiter argues that carriers must strike a balance between appealing to companies by enabling them to reach consumers through cell phones, while keeping their own customers' personal information secure and trust alive.

Mobile marketing in a high-tech environment will become more attractive to marketers as the adoption of rich media devices goes up and the cost for digital advertising goes down. Additionally, the report finds that interactive marketing budgets are increasing for emerging technologies like mobile. Julie Ask, research director with Jupiter Research and author of the report, says, "There isn't a lot of experience yet, so as [display advertising] becomes more mainstream, it'll take less time. They will be able to reuse assets."

Consumers receiving the message are much less excited about the prospect of a mobile marketing explosion; however, attitudes toward cell phone marketing appear to be softening. The report finds that in 2005, 42 percent of consumers said that they would never want to receive commercial text messages under any circumstance. This percentage lowered to 38 percent in 2006. Likewise, 12 percent of consumers in 2005 only wanted to receive opt-in text messages. Eight percent reported this restriction in 2006. Although consumers appear to be seeing more benefit in commercial SMS, Jupiter advises that carriers must tread lightly in this area. Ask writes in the report, "Carriers must resist any temptation to open up their networks for broadcast messaging from advertisers." Any kind of outreach consumers view as invasive will often be blamed on the carrier rather than the company from whence it came.

The study explores various methods of growing advertiser income without losing customer trust. The report argues, "Wireless carriers should continue to leverage integrated campaigns with media entities to raise consumer awareness of the media as a marketing channel." The report finds media connected initiatives to be more effective than a carriers' attempt to trade services for personal information. Eighty percent of all cell phone users say that no free offer such as free digital content, ring tones, games for cell phones, or wall paper would persuade them to trade information, such as age, gender, or zip code.

With an upsurge in cell phone marketing, carriers have the potential of greatly increasing both their bottom line and their customers' attrition. The report argues that the wise path is to go ahead with marketing efforts while staying sensitive to consumer preferences. "Display advertising offers an interesting opportunity for carriers on their own portals, but they must abide by the same best practices and guidelines as other advertisers."

Accounting on the free'n'easy

Date: 30/01/2007
Source: AGE
Publication: The Age Section: Computers Page: 9

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Software developer NETapplica has found a novel way of recruiting new users for its accounting application - giving it away free.

NETapplica has developed NETaccounts, an accounting package that is hosted on the internet and used by clients through a web browser.

Chief executive Marc Lehmann says NETaccounts has the functions to compete with market leaders such as MYOB but the free giveaway is designed to attract micro-businesses and start-ups.

Users can make up to 10 free transactions each month. Higher usage attracts a monthly subscription fee starting at $15, or users can chose to upgrade to an e-commerce version with a connection to an electronic payment gateway and automated invoicing.

"If they are doing more than 10 invoices a month they probably don't mind paying for it as well," Mr Lehmann says.

NETapplica is one of several Australian software developers that are using the on-demand computing model (also called software-as-a-service) to sell and manage its applications. Having the software available on the web eliminates the need for traditional packaged software distribution and allows the developer to centralise its support.

The model has been popularised by American developers such as Salesforce.com and NetSuite. According to analyst company Gartner, by 2011 25 per cent of new business software will be delivered as a service on demand.

Mr Lehmann says the on-demand model is a key factor in NETapplica being able to keep its costs low, with the company currently operating with a team of five.
"We can do things a lot more quickly and effectively to build a product like ours with a small team."

It is a strategy that has also been successfully pursued by Sydney-based developer MassMedia Studios for its product Traction, which helps companies manage their online communication with consumers.

MassMedia's sales and marketing manager Leon Young says the minimal resources required to support on-demand software has improved Traction's popularity, particularly in Britain, where its clients include the fast-moving consumer goods companies Unilever and Cadbury-Schweppes. The hosted model has also been pursued by Queensland-based developer osCommRes for its open-source reservations software.

Many of the on-demand applications available today are linked to a Salesforce.com initiative called the AppExchange. This is an online marketplace of on-demand applications that tie into Salesforce.com's core customer relationship management application.

The Sydney-based marketing services company Sqware Peg has released an SMS messaging service based on the AppExchange model, and is developing a second application for event management. NETapplica is also working to integrate NETaccounts into the AppExchange.

Mr Lehmann says he began developing the idea for NETaccounts in 1998, when he used the share portfolio management tools of the Yahoo Finance service.
"I remember thinking this would have been superb if I could have used it to manage my own finances. So I thought this was the way things were going to go for everything."

Being web-based means Mr Lehmann can further reduce the cost of the software for users by letting them chose to receive advertisements through the NETaccounts web interface - as do applications such as Yahoo!Mail.

"You've got to leave this stuff up to the consumer. There is a set of consumers who would like the advertising and are happy to pay less to see the advertising, so if we can facilitate that, we will."

The first version of NETaccounts was released in April 2000 as a basic accounting product, with the early years spent focused on making it suitable for accountants and larger clients. In May the company will launch a premier-level version of its product, including multi-currency capabilities.

"Typically the markets develop for the big end of town first, knowing that the general consumer was going to come in later in the cycle. We took the approach that as the others would be competing at the upper level, so we would go for the bottom end."

Today NETaccounts has 700 active customers, and Mr Lehmann says that figure is growing by about 70 per cent annually. The free giveaway represents the company's first foray into mass marketing.

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You Don't Have To Be Locked In

Software services may be a smart alternative, but for how long?

by Mary Hayes Weier

Greg Gianforte, CEO of RightNow Technologies, likens the large software companies to dinosaurs. "Consolidation is an inevitable step in a mature and declining market," he says. "The second world is one of software as a service, which is at the very beginning of its growth curve."
Nice try, but perhaps a
bit premature, considering software from the major vendors is entrenched in every large U.S. company. Still, Gianforte, whose RightNow is among the software-as-a-service highfliers, has a point: It's hard to find a CIO who doesn't have at least some interest in alternatives to the applications albatross.

They're there. Open source software is increasingly attractive. Google is pushing a Web-based application model that has Microsoft worried. And software-as-a-service vendors such as RightNow and Salesforce.com, hundred-million-dollar companies in their own right, are growing 40% to 60% a year.

Case in point: Aon, the $10 billion-a-year insurance company, has rolled out Salesforce to more than 5,000 employees worldwide. "The software option wasn't a positive one for us," says Phil Clement, head of Aon's sales systems.

Every major software vendor has a software-as-a-service play, or one in the works. SAP said last week that it's prepping a software service for midsize companies that will cost considerably less than packaged software. Potential customers will be able to test it on the Web before committing.

As software as a service gets more popular, the leading providers will become obvious takeover candidates. IDC predicted last month that it's likely Salesforce.com will be acquired sometime this year.

When that consolidation wave hits, who will be the dinosaurs then?

Does Software Consolidation Stifle Innovation?

The software industry is quickly settling into a gang of four: IBM, Microsoft, Oracle, and SAP. Where will the next billion-dollar competitor come from?

By Mary Hayes Weier

Barry Libenson, CIO at Ingersoll Rand, considers himself fortunate. While the odds increase every day that the company's key software vendors will get caught up in disruptive takeovers, so far Ingersoll Rand has landed on the right side of every deal. "The companies we've aligned ourselves with are doing the acquiring," he notes, pointing to Oracle as a primary example. "The scary thing is when you're at the other end of the spectrum. Then you're at the mercy of who's doing the acquiring."

There's reason to be concerned, or at least cautious. With software industry consolidation barreling along, far outpacing any other U.S. industry, CIOs must plan carefully and think fast. Will an acquiring company stop innovating the technology you've standardized on, content to feed on a steady diet of your maintenance fees? Will a clammy-palmed salesman fronting a software giant replace your straight line to a smaller vendor's CEO? Or will the acquisition bring positive change, with a vendor's new parent investing more in research and development and giving you access to a larger, more knowledgeable support team?

Software consolidation isn't the voracious monster some people perceive it to be. True, it's driven by big vendors desperate for growth. But technology managers needn't fear that consolidation will eat away at competition or innovation in the software industry: There are still plenty of new ideas and novel approaches seeping in.


When it comes to acquisitions, software dominates all technology sectors, accounting for 40% of the $298 billion in tech M&A deals done last year and half of the $306 billion in deals in 2005, according to Thomson Financial. The runner-up: Internet companies, which accounted for just 18% of last year's tech M&As.

While software always has been an acquisitive industry, the deals are getting bigger and more complex. Last year, 1,726 software companies were acquired, the highest number since 2000, according to investment firm Software Equity Group. But more impressive was the size of some of those deals: Hewlett-Packard's $4.5 billion acquisition of Mercury Interactive, EMC's $2.1 billion purchase of RSA Security, and IBM's acquisitions of FileNet and Internet Security Systems, both of which exceeded $1 billion.

These deals came on the heels of Oracle's big-bucks, high-profile acquisitions of PeopleSoft, Siebel, and Retek--as well as 23 other companies--over the past two years. IBM isn't far behind, with 22 notches on its belt over the same period. Microsoft has bought more than 25 companies in that time, though most of them were tiny startups acquired under the radar.

This year, megadeal watchers are training an eye on Cognos and Business Objects, both with annual revenue in the $1 billion range, as potential acquisitions. Business intelligence is hot, and the biggest vendors want in--hence Microsoft's acquisition of ProClarity last April. NCR's recent decision to spin off billion-dollar-plus data warehousing specialist Teradata is viewed by some as making Teradata a more attractive acquisition target to big tech companies or even a private equity firm. Siemens last week acquired UGS, a maker of product life-cycle management software, for $3.5 billion in cash from three private equity firms.

In the past four years, 430 publicly traded software companies, most of which had grown through acquisitions themselves, have been swallowed up, says Ken Bender, managing director at Software Equity Group. Also, more private investors are getting into the fray. Witness Hellman & Friedman's recent $1.3 billion acquisition of Intergraph. "Private equity firms and larger software companies are awash in cash," says Bender.

Revenue-hungry vendors are eyeing the software-as-a-service model, too, which is getting tons of interest from both the venture capital and the user communities. A buyout of Salesforce.com, one of the most successful SaaS companies, would provide a big IT vendor a splashy entrée. IDC predicted last month that Salesforce will be acquired this year.


Why all the big deals? Theories typically center on industry maturity, vendors in search of new growth and market opportunities, or a combination of the two. Some view consolidation as the natural progression of an aging industry, invariably dredging up a comparison to the global auto industry. But consider that both software suppliers and buyers have more cash to spend than in years past. IT budgets have increased steadily since bottoming out five or six years ago, and it's universally forecast that spending on software will continue to rise this year, as long as something unexpected doesn't derail the economy. Meanwhile, software companies, which were under Wall Street pressure to focus on profitability several years ago, have shifted back to revenue-growth strategies to capture more of those rising IT budgets. So they're buying companies with technologies that either complement their own or drive their businesses into new areas.

Gary Scholten, CIO at $9 billion-a-year Principal Financial Group, says he has highlighted software industry consolidation as a "risk issue and an opportunity" with the company's board. Scholten learned the hard way. A while back, one of the financial services company's software providers was acquired by an IT infrastructure vendor that wanted to take the software in a completely different direction, one that didn't mesh with Principal Financial's IT infrastructure. So Principal had to dump the software and transition to something else.

On the other hand, acquisition by a larger company can put a struggling software supplier on more solid financial footing and allow it to scale its architecture, Scholten says. And consolidation can actually increase a customer's influence with an alpha vendor. For example, Principal Financial's influence with Oracle has increased as Oracle has acquired companies Principal does business with. "For every negotiation we have with them, that plays a part," Scholten says. Premier customer status can mean better volume licensing deals, better access to vendor executives, and inclusion on customer advisory boards to influence the vendor's technology road map and strategic direction.


Despite rising budgets, the dictate to run a lean IT organization hasn't changed. Working with fewer vendors means spending less money managing relationships. As a major Siebel account and a large Oracle customer, Ingersoll Rand's Libenson says he had significant negotiations going on with both companies. Now he deals with only one. "The fewer companies I have to deal with, the easier my job is," Libenson says. And he applauds Oracle's acquisition of Oblix, which Ingersoll Rand was using for identity management. "It really legitimized the technology and helped tremendously from an integration perspective," he says.

Still, when it comes to software moving from one owner to another, integration is a major concern, along with upgrades and licensing. Oracle co-president Charles Phillips said at Oracle OpenWorld in October that there will be "no forced march" migrations from one application platform to another, even as the vendor continues its own march toward the integrated applications framework known as Fusion, the first part of which is due next year. Oracle will provide upgrades soon for its Oracle E-Business suite and the JD Edwards, PeopleSoft, and Siebel product lines. The JD Edwards upgrade will be the first in 10 years, the company says. In December, Oracle announced an umbrella software licensing scheme for all its applications, in an effort to eliminate the complexity of sifting through the various schemes of PeopleSoft, Siebel, and others.

Ingersoll Rand's Libenson has had some experience integrating Oracle's and Siebel's apps, and he'd like to see Oracle make faster progress. "But being realistic, integrating two monolithic platforms is a huge amount of work," he says.

Oracle's acquisition strategy is losing it some deals. Sport Chalet, a $350 million-a-year retailer, chose SAP's retail offering over Oracle's because of the lack of integration between Oracle financial apps and the retail apps of Retek (acquired by Oracle in 2005), says Sport Chalet CFO Howard Kaminsky.

Musical instrument maker Yamaha uses Oracle for ERP, but it bypassed the company's CRM software for Salesforce's on-demand product, using Tibco Software to connect its Salesforce apps with its ERP system. The main reason it chose Salesforce was because software as a service offered faster implementation and reduced complexity, says David Bergstrom, Yamaha's corporate planning manager. He's having a hard time understanding how Oracle's acquisition strategy will benefit his company. "It seems like it's just gotten more complicated for them," he says, considering the "menu of things" Oracle offers up. "It's not as simple, clean, and clear as with a Salesforce solution."

Gartner analyst Alexa Bona says she has heard a fair amount of grumbling from Oracle customers about the maintenance Oracle provides after it acquires a software vendor. As support and other personnel from those acquired companies get laid off or move on, "some customers feel some of the skills sets are missing, yet support fees are higher," Bona says.

Not so, argues Oracle senior VP Sonny Singh. Oracle surveys its customers periodically on their experiences with support and communications, and their understanding of Oracle's vision, Singh says. In the last year, Oracle's customer satisfaction rate, as measured by its Global Customers Program surveys, is up 16%, though he won't disclose the base number for that increase other than to say it was high.

That satisfaction is in large part because of Oracle's structure, Singh says. After companies are acquired, they're placed in the appropriate vertical business unit, such as retail or utilities. That makes it easier for customers in a particular vertical to interact with the development, marketing, and implementation folks for the software they're running, because their services are all under one vertical umbrella.

Not surprisingly, Oracle's competitors are trying to poke holes in its acquisition strategy. Marc Benioff, the flamboyant founder and CEO of Salesforce, calls Oracle "the GE of software," because it runs those software business units as separate profit-and-loss centers, much like the conglomerate GE runs its aircraft engine, plastics, and broadcasting units. "It would be a breakthrough in software management if they could make it work," he says.

Steve Mills, senior VP and group executive of IBM Software, cracks, "Fusion is about confusion." IBM should talk, having practically pioneered the big-bang software acquisition--and interplatform integration headaches--with its $3.5 billion buyout of Lotus Development in 1995.
In recent years, IBM has taken a more focused, smaller-scale approach to acquisitions. Yes, it's biggest was a doozy: the $2.1 billion acquisition of development toolmaker Rational. But that was back in 2001. Mills says IBM isn't avoiding big acquisitions--it paid $1.6 billion for FileNet in a deal that closed in August--but it's more focused on the
middleware market, including software related to IT infrastructure and application integration. "It gives us the greatest leverage," he says. "If we moved outside these connected spaces, we'd have a much harder time getting return." IBM's fourth-quarter earnings results showed an 11% boost in profit to $3.54 billion; the company attributed a chunk of that growth to its 2006 software acquisitions.

Mills insists that IBM has taken great care in preserving its customer relationships during acquisitions. "We invest more in technology than prior to the acquisition," he says. "We invest more in sales and support than the company did prior to the acquisition." The antithesis, he says, is the "Charles Wang model," referring to the founder and former chairman of Computer Associates, which tore through the software industry in the 1990s with acquisition after acquisition, engendering animosity among its acquired customer bases by cutting off development, milking maintenance fees, and forcing users toward software they didn't want. "I don't think customers are distressed that acquisitions are occurring; they're distressed when the acquiring company shows no level of commitment and investment in the technology," Mills says.

But IBM can't please all the people all the time, either. David Hauser, CTO of telecom firm GotVMail and a former Tivoli customer, says Tivoli changed dramatically after it was acquired by IBM 10 years ago. In just the last four years, 15 IBM acquisitions have been absorbed by the Tivoli brand. "Tivoli became too much cost, too much hassle, and really went away from its core business of monitoring," Hauser says. As Tivoli grew, Hauser had difficulty finding information about the original technology. He finally gave up and moved to an open source network monitoring tool from GroundWork called Nagios.


Principal Financial's Scholten says he'll steer clear of a hot startup's promising new technology if that company appears to be a takeover candidate. Ultimately, it will hurt innovation in the software industry if influential customers like Principal Financial shy away, he admits.

But not all technology users think that way. "I don't think people are so focused on operational efficiencies that they're incapable of seeing when something interesting, and perhaps better, is happening," says longtime industry watcher Amy Wohl. What's more, venture capital spending on tech startups is on the rise.

Certainly, consolidation means fewer choices. When you have two main ERP options, rather than the five or six that existed five years ago, you have less negotiating leverage, Scholten says.
There's no getting around the fact that the largest software companies--IBM, Microsoft, Oracle, and SAP--are getting bigger. Some insist that a weak IPO market, acquisitive IT vendors, and buyers' desire to work with fewer vendors will make it impossible for a sizable fifth or sixth rival to emerge. "You will never see another billion-dollar enterprise software company," says Glover Lawrence, managing director at McNamee Lawrence & Co., an investment firm specializing in tech M&As. "Google may eventually compete with Microsoft, but not as an enterprise software company."

Conventional wisdom--but is it true? Salesforce predicts its revenue will exceed $700 million in the coming year. Another Silicon Valley highflier, VMware, reported that its fourth-quarter revenue rose 101% over the year-earlier quarter to $232 million, putting the company on an annual run rate of $900 million. It was the fifth consecutive quarter that VMware's year-over-year growth surpassed the previous quarter's, an exception to the rule that as big software companies get bigger, growth must slow down.

But even though VMware, acquired by EMC in 2004 for $625 million, operates as an independent subsidiary (separate sales, marketing, and R&D from the mother ship), it isn't an independent company. Even if it were, "VMware is a real anomaly," CEO Diane Greene says. For a software company of its size to grow as fast as it is, it must add a new layer to the software industry's "stack." In VMware's case, it's virtualization. For Salesforce, it's software as a service. For Google, it's selling ads. "Those new layers don't come around very often," Greene says. "There aren't that many really significant new things."

Maybe. Or maybe we just haven't seen them yet. "There's not a country in the world that's not trying to foster some sort of indigenous software industry," says IBM's Mills. Salesforce's Benioff says he's searching for the next killer app, but it won't come from his company: He thinks it will come from a developer in Shanghai, Bangalore, Eastern Europe, or some other remote place, delivered over Salesforce's AppExchange platform. "There's no way that developer is going to get to a Merrill Lynch or other big customer without us," Benioff says.

SAP is hoping for something like that with its service-oriented architecture strategy. With its SOA technology, called NetWeaver, SAP doesn't need to acquire. Instead, it's partnering with hundreds of smaller vendors whose software services snap into SAP's ERP suite, mySAP, explains Bill McDermott, CEO of SAP Americas. With big software acquisitions, "you have to rewrite the code base of the individual companies, integrate the culture and people from very different companies, and then get the customer to procure disparate pieces," McDermott says. Oracle's acquired apps aren't yet service-enabled. "So theirs is like a lung-and-heart transplant," he says, "where ours is plug and play."

Software companies essentially have two growth alternatives: innovate or acquire. SAP is hoping its growth will come from the former, by way of NetWeaver and an upcoming software-as-a-service offering that, it claims, will be different than what's currently available.

There's a lot riding on that innovation. SAP's financial results last week were disappointing: Software revenue for its fourth quarter was up 7% to 1.3 billion euros and 10% to 3.1 billion euros for the year, lower than what SAP had expected. At the same time, SAP said it's preparing a software service for midsize companies that they can test on the Web before committing, will cost them considerably less than a package software suite, and, unlike Salesforce's, will let them store data on local systems. It's unclear when the offering will be available; SAP says it will provide details within a few months.

Microsoft, on the other hand, is both acquiring and innovating. Perhaps more than any software company, it's moving aggressively beyond its core software business, into unified communications, security, and mobility. And then there are the consumer products: Zune, the iPod challenger, and the wildly popular Xbox 360, itself something of a technology platform and driven by the innovation of outside developers. Salesforce's Benioff describes Microsoft--with obvious envy--as one of the few successful "multicategory, multiproduct" tech companies.

Microsoft isn't averse to throwing around its considerable weight. In November it announced new client access licenses for several products, including Exchange and SharePoint; they require additional licenses for certain features--antivirus protection, for example. That will drive up costs for some customers, but not all: Many Exchange customers already have antivirus software in place, so they won't pay Microsoft extra for that feature.

Microsoft in the past few years also has gotten more aggressive about persuading customers to buy broader license agreements, by charging higher fees for selective agreements that cover specific products. IBM executives called a meeting with several Forrester Research analysts, complaining that through its license practices, Microsoft is trying to eat up so much of IT budgets there won't be enough left for other vendors, says Forrester analyst Julie Giera. Forrester offers coaching classes for companies entering negotiations for Vista, Office 12, and other new Microsoft apps, so they end up with--and pay for--only what they need.

"All the vendors would love to have you do an all-you-can-eat buffet," says Scott Rosenberg, CEO of Miro Consulting, which helps IT buyers negotiate software licenses. "It's kind of like those vacation packages that say, 'Don't worry, relax, you don't have to worry about scrambling for your credit card, just belly up to the bar.' But unless you drink heavily or eat like a football player, you're going to overpay."

Indeed, in this era of bigger is better, it's wise to keep an eye on not only what you're consuming, but also what's getting consumed, and by whom. A few weeks of secret negotiations between two software companies could leave a customer with an impressively bigger and better vendor, or a bellyache of uncertainty and obstacles.


Special Report: The 25 Fastest-Growing Tech Companies

Out of 2,200 public U.S. technology stocks, these 25 winners passed hurdles for growth and profitability.

by Paul M. Murdock

Who's the next Google? for now, Google (nasdaq: GOOG - news - people ) is. It slipped into second place on our list of the fastest-growing tech companies but still shows triple-digit annualized revenue growth over the past five years. The company cannot sustain its current growth rate for long, but last November it aided its fast-growth status by grabbing YouTube for $1.65 billion. In addition to Google, 11 technology overachievers returned to this year's list, including three companies that have made the cut for each of the past five years. The 25 stocks listed here a year ago posted an average price gain of 16% versus an 8% rise in the Nasdaq Composite index. Our selection process: We require at least $25 million in sales, 10% annual sales growth for five consecutive years, profitability over the past 12 months and 10% estimated annual profit growth for the next three to five years. We exclude firms with significant legal problems or other open-ended liabilities and also consider accounting and corporate governance scores from Audit Integrity of Los Angeles in making our final cuts.



Sqware Peg - Google Adwords Certified Professionals

Photobucket - Video and Image Hosting

Salesforce.com for Google AdWords

First “Word to Close” Search Marketing Service

by Jamie Grenney

  • Tightly integrates Google and salesforce.com for the creation and placement of ads, dynamic tracking of results, management of opportunities, and closing of deals
  • Dramatically improves efficiency and utility of search engine marketing by closing the customer loop on ad placement

Salesforce.com [NYSE: CRM], the technology and market leader in on-demand business services, announced in 2006, Salesforce for Google AdWords, a tightly integrated service that combines the dynamic creation of Google AdWords with the on-demand business applications of salesforce.com. Salesforce for Google AdWords delivers for the first time, an end-to-end, on-demand service that allows companies to create, manage, and measure search engine marketing campaigns, all from directly within Salesforce.

The tight integration delivered in Salesforce for Google AdWords empowers users by providing visibility into the entire life-cycle of a campaign--from creation and placement of ads, to dynamic tracking of results, management of opportunities, closing of deals and measurement of return on investment (ROI). This unprecedented visibility dramatically improves the efficiency and utility of search engine marketing.

“Salesforce for Google AdWords brings together the power of Google, the Consumer Web leader, and salesforce.com, the Business Web leader, enabling companies of all sizes to go seamlessly from word to close,” said Marc Benioff, salesforce.com chairman and CEO. “Business applications are moving to The Business Web and Salesforce for Google AdWords is a perfect example of the innovation that is possible when we embrace the reality that the future of software is on-demand business services.”

Search engine marketing is widely recognized as a high growth market segment. As advertising programs are evolving online, becoming more targeted and generating better results, many companies are seeking ways to accurately correlate their advertising campaigns to leads and closed business. A recent AMR Research survey of consumer product companies demonstrated that measuring return on marketing investment ranked as the top technology spend priority.

"Companies have been searching for better ways to understand how spending on online search engine advertising delivers real-world sales," said Rebecca Wettemann, vice president of research at Nucleus Research. "Salesforce for Google AdWords bridges the gap to enable companies to track how - and if - their investment in online advertising actually delivers."

“Salesforce for Google AdWords has given us a way to easily manage our search marketing campaigns,” said Gregg Oldring, President, Industry Mailout. “We now have clear visibility into which keywords are generating results and can correlate them with specific leads in Salesforce. By having this info easily visible and accessible, we can spend more time on other valuable activities, such as pursuing customers—or fine-tuning our next AdWords campaign.”


Salesforce.com Keeps Its Apex Promise

Salesforce.com releases the much-anticipated Apex platform today, which may lead to a long tail of advanced small niche solutions.

by Jessica Sebor

Salesforce.com hit its deadline today with the release of the Apex on-demand platform. Apex, which will be delivered with Salesforce Winter '07, was announced in October 2006 at the company's Dreamforce conference. According to Salesforce.com, the release of Apex will advance both the depth and breadth of on-demand business applications by making it less risky and expensive for smaller companies to develop on-demand applications. Now that Apex has become available, the market will now see whether the platform and code will truly jump-start a fully on-demand world or if it will stand primarily as a tool for small businesses.

Ariel Kelman, senior director for Apex platform product marketing, explains that in the CRM space, "Only a small handful [of companies] have been successful at building large, growing on-demand business applications." Salesforce.com has been one of them. However, the Apex release will allow others to use the technology and programming language with the Apex Code that can enable companies to build their own solutions without infrastructure requirements. Kelman says that through the use of Apex, "Any developer can become the next Salesforce.com."

Apex is a multi-tenant platform through which users leverage identical versions of the salesforce.com software and hardware. The company cites the central benefit of multi-tenancy as the ability for users to receive upgrades automatically without damaging any previously built customizations or integrations. Additionally, partners and customers will be able to use the Apex Web Services API and real-time messaging and integration services. Apex Web Services API can help companies manage data relationships, and the real-time messaging service keeps companies updated on relevant business events. All Apex applications will be able to be shared through salesforce.com's AppExchange.

Denis Pombriant, founder and managing principal of Beagle Research, says that although the release carries no surprises as it delivers on the announcement made last fall, the incubation time between announcement and release may have been beneficial to the market at large. He explains that there is still a long education curve that needs to be fulfilled in on-demand software. "I think 2007 is going to be a big transition year and the company is in the position of doing some real education of the market place."

Salesforce.com says that the release of Apex follows a mission to allow on-demand to fill out every corner of the enterprise software space. Pombriant agrees that the platform will make it possible for small niche companies to develop, and it also promises the ability for vertical solutions to become more highly specialized through collaboration. Although Kelman pushes the message that other Salesforce.coms may appear, Pombriant says that this is more about the smaller players. Of Kelman's assertion, Pombriant says, "It's like saying, 'With this bat you can hit a home run.' That's true, but more often than not you win a game with base hits. With this application you put the bats in the hands of more people."


Campaigns to Cash Webinar

Achieve greater ROI by tightly integrating marketing with sales
  • Looking to increase lead conversion rates and prevent leads from slipping through the cracks?
  • Would like to be able to segment customers and prospects to create targeted campaigns?
  • Unsure which marketing activities are having the greatest revenue impact?

Dates and times: Duration 30 mins.

January 23rd, 200712.00 pm Australia

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Join us for a look into how Salesforce provides powerful campaign management capabilities that allow you to maximize the efficiency of your entire online and offline marketing mix.

Discover how to tightly integrate marketing with sales to manage leads, convert them to opportunities, ensure data quality, and analyze and report campaign results.

Learn from our partner SqwarePeg Agency-on-Demand, an on-demand marketing agency, how new delivery models are giving rise to a whole new level of marketing control, efficiency and accountability.

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What's in a Lead?

Defining what a qualified lead means to a company is the first of many steps on the road to closing the marketing and sales loop, according to a new report.

by Jessica Sebor

What do we talk about when we talk about leads? Before implementing enterprisewide technologies or rolling out million-dollar marketing campaigns, it is basic questions like this that companies must ask themselves to ensure revenue return. A new report from IDC, "CMO Advisory Best Practices Series: Marketing's Lead Management Process," underlines the idea that companies in the technology vendor community still need to find a common language around lead qualification and lead management. The report finds that although 50 percent of marketing investment is allocated to demand generation, many companies still lack the set processes necessary to understand its effectiveness, a crucial step in reaching the lead management holy grail: complete loop closure.

Michael Gerard, director of IDC's CMO Advisory Practice, explains that lead management continues to be a struggle for companies in the technology space as an increased focus on marketing accountability has left many scrambling to keep up with demands. "If we look at the technology space in a general way, few companies historically have been truly a marketing lead." Gerard says the first challenge companies face in creating this focus is, "How do we develop the culture and the technology so that as a lead is generated it gets identified?"

Across the IT vendors surveyed, IDC found the current state of lead management performance to be a 3.6 on a 1-to-6 scale of effectiveness. The vendors reported an average desired shift to a five on this scale, equating to a 39 percent improvement. The report shows that all sides of lead management must be examined and overhauled in order to reach this goal.

Firstly, an individual or team must be assigned responsibility for the lead management process by the CMO, according to the report. A single responsible authority will be better able to create a consistent language and process. The report highlights the importance of sharing this common process and language across the organization. To do so, Gerard says that sales and marketing must become more closely aligned both from a strategy perspective and during lead hand-off. "We see marketing and operations working closer together as one of the key ways companies have strived toward improving that alignment." The report cites that this union will improve lead transfer process, lead capacity planning, and lead attendance process.

The end purpose of lead management for marketing is to better understand campaign effectiveness. This ultimately means closing the loop from the birth of a lead to the sale. IDC advises that companies trace their back end connections to the front end. Matching lead and shipping addresses is one way of doing so. Additionally, better communication between the company and its partners can help the company get better information on closed deals. Gerard says that although most companies (especially enterprises) are not at the point of a closed-loop understanding yet, they should be striving toward this goal by focusing on the basics. "They still really have to develop the foundation of the process before they get to that full, closed lead."

CRM Market in Asia-Pacific

According to Gartner, the CRM market in Asia Pacific is forecasted to grow at a compound annual growth rate (CAGR) of 17.9%, between 2006 and 2010, to reach US$679.6 million[1].

In another recent report, Gartner cites that 25% of new software will be delivered as software as a service by 2011.


A media search party to last all year

2007 is likely to be watershed year in digital media in Australia

Michael Sainsbury

There will be more activity than ever before in terms of mergers and acquisitions, partnerships and the sheer weight of cash being flung at the online operations of Australia's major media groups. But the single biggest focus will be on the internet's boom business of search.

The word floating around the local online sector is that revenues across the three main businesses of the net - banner/display advertising, classifieds and search - crossed the magic $1 billion mark in 2006.

It's hard to get a truly accurate picture because there is limited visibility of the revenues of one of the biggest players: Google. For those who've been napping, it's certainly time to take the worldwide web seriously. While that's still short of the big guns - newspapers about $4 billion and television about $3 billion - it's growing much, much faster.

In fact, during December, the media buyers who have traditionally stitched up annual deals with the TV stations and print media at that time, were also inking similar deals with the so-called big six of the internet in Australia.

Well that's not entirely true, only four of the big six focus on the display advertising for which traditional media buyers want to strike annual deals: News Limited (publisher of The Australian), Fairfax, Ninemsn and Yahoo7. That leaves Google, which is just in search right now, and Telstra, which pulls in access revenues on its BigPond arm and mainly classifieds through Sensis and Trading Post.

The latest money-go-round will be fuelled by the two media deals at the close of last year by the nation's two biggest television moguls - James Packer and Kerry Stokes - to sell 50 per cent of their media assets to private equity firms.

This means that two of the big six online players - PBL Media and Seven Media - are cashed up. As well News, by dint of its global size, is always cashed up, if you like - as is Google. Telstra too, has plenty of money to spend, particularly on Sensis and BigPond, which are its designated growth businesses.

Only Fairfax, in the midst of a deal to expand through its purchase of Rural Press, might appear strapped for cash.

Still, there are unlikely to be any mega M&A deals in Australia's digital media or online sectors.

It's not like this clever country is producing ventures such as MySpace, YouTube, Bibo or the latest web-based social networking sensation, SecondLife.

Sure, the occasional small deal, such as last week's low-million purchase of online ticketing group Moshtix, will pop up from time to time, and there is plenty of money out there sniffing around.

Rather, local digital media groups will pump funds into growing their existing businesses. Which takes us back to search.

The $1 billion of Australian internet revenue last year was roughly split evenly across the main categories: display, classifieds and search.

Display advertising, which is more predictable, is expected to grow about 30 per cent this year. Classifieds growth is slower at about 20 per cent but search is tearing ahead at somewhere over 50 per cent, perhaps as high as 70 per cent.

Such growth will pull Australia into line with other countries where search is already the biggest, and fastest-growing, category.

But the Australian market is distorted in search too. Google has 80-85 per cent of the search market - in the US for instance it's under 50 per cent. MSN and Yahoo hold low to mid-single digit shares and so much for the rest at this stage.
Much of the action has been, and will continue to be, in local search, the online category that threatens Telstra's Yellow Pages in the medium term.

But Telstra's bid to best Google with Sensis search has failed so far. News's TrueLocal has found only a very limited market and Ninemsn's Mylocal has been the sector's biggest (although possibly cheapest) dog.

So this year, expect redoubled efforts from News and MSN to wrest some share from Google, and Yahoo is likely to launch a local search product in Australia some time this year.

As for Fairfax, its search strategy remains unclear, with its relationship with Yahoo7 not on the most solid footing.

After licking their wounds (counting their losses) and dozing off for a few years after the tech boom/bust, Australian digital media wannabes woke up with a start last year, all naming new chiefs and finalising alliances: Yahoo7 was formed, as was News Digital Media.

Unencumbered by too many legacy businesses, PBL got a great jump-start on its rivals with its market-leading Ninemsn portal - which takes the biggest share of display ads - and its leading job and car sites. However, it's certainly no guarantee that it will finish in first place.

For evidence of how quickly new companies can run over the top of longer and better established rivals, look no further than Google vis-a-vis Yahoo, Microsoft and others no longer with us.

And Google is certainly where all eyes will be focused, one way or another, in 2007.


Saas in the Asian Context by Springboard Research

Filed in archive Enterprise Software
by prashanth

Springboard Reseach has recently publised a report titled "The Software as a Service Market in Asia Pacific, 2005 to 2008: Executive Overview". Its a report that as the name suggests covers the SaaS market in the Asian market.Report is based on a survey of 210 CIOs and IT decision-makers at small and medium enterprises in Australia, China, India, Korea, Malaysia, the Philippines and Singapore helps to contribute to this executive overview.The report is accessible at the site.

Below are excerpts from the report:

Our review of the Asian SaaS market revealed a particularly dynamic, promising and exciting corner of the IT market. Many segments of the market are doubling in size every year, and the pace of strategic experimentation is astounding.

  • The SaaS Market is Here to Stay: Unlike many hot IT industry buzzwords that come and go, all evidence we gathered points to the long term staying power of the SaaS model. Early adopters report significant savings and high satisfaction, vendors are investing heavily, and ecosystems to support SaaS growth are taking shape quickly.
  • SaaS is not Just for Asia's Small and Medium-sized Businesses: Although adoption levels for SaaS will be greater in the SMB market sector, vendors indicated there is activity in the large enterprise sector as well, and that upper mid-market and large businesses represent some of their largest and most important clients.
  • Competitive Frameworks in the Enterprise Application Industry will be Reshaped by SaaS: Traditional enterprise application vendors are already adjusting their offerings to address the SaaS dynamic, and new formidable competitors are emerging at a rapid pace.
  • SaaS is in the Process of Branching out of the Core CRM Segment to other Application Markets: CRM has been the pioneer and largest segment of the SaaS market, but a myriad of other markets are now gearing up for a SaaS push.
  • A SaaS Channel and Ecosystem is Emerging in Asia Rapidly, but it is Marked by Experimentation and Fear: The race is on as traditional software firms and SaaS vendors are working hard to develop extended regional networks of resellers, system integrators (SIs) and developers.
  • The Asia Pacific SaaS enterprise applications market amounted to US$80 million in 2005, and generated 82% revenue growth over the previous year. The market is projected to grow at a CAGR of 84% from 2005 to 2008.
  • CRM is the largest SaaS application segment in the region, representing 50% of total SaaS revenue in 2005. CRM is trailed by Web Conferencing and Collaboration (30%) and back-office applications such as ERP (9%)
  • Australia is the largest regional SaaS market with a 36% share of 2005 Asia Pacific revenues. China/Hong Kong (16%) and Korea (10%) are the next largest regional SaaS markets.
  • Salesforce.com leads the regional SaaS market with a 21% revenue market share. WebEx (11%), RightNow Technologies (9%), Oracle (6%) and NetSuite (4%) follow the market leader.
  • Based on a survey of Asian Small and Medium-sized enterprises, 41% were aware of the SaaS concept. Only 29% of SMEs surveyed had reported adopting SaaS; however, many likely did not fall into Springboard's official SaaS definition, which would lower this figure.
  • The primary factor driving SMEs to adopt SaaS applications is cost benefit (33%), followed by ease of use and business benefits.
  • Of the surveyed SMEs that had adopted SaaS, they reported savings ranging from 5-55% compared to the traditional licensed model, with the majority (58%) reporting estimated savings of between 20-30%.
  • The primary factor preventing SMEs from adopting SaaS is the perception that it is more expensive than licensed software. The next most important inhibitors are a lack of SaaS understanding and security concerns.
  • Among SMEs that had not adopted SaaS, 25% indicated plans to do so within the next 12 months. The primary application being planned is CRM, followed by web collaboration, security and HR applications.


Great Marketing Plans

How they fuel demand generation

by Jeff Pedowitz

As I work with many marketers, I am amazed at how many do not have a written marketing or business plan. Generally, close to 90 percent of companies I work with do not have a formal plan. Most have a budget, but that is as far as it goes. You know the old adage, plan the work and work the plan. Unfortunately, most marketers are spending too much time reacting to the world around them and not taking the time to write down a solid strategy and plan. Demand generation suffers when it is not supported by a well-thought-out business plan.

First Things First: Analyze
Writing a marketing plan starts with a situation analysis. What products and services are you selling? What is the market you are competing in and how large is it? Who are your competitors? Where do you sell? What does your target profile look like and how do you reach them? What is your historical sales performance for each of your products and services?

After understanding who you are and the environment in which you operate, you need to conduct an honest and thorough SWOT analysis. What threats are out there in the marketplace or internally that could affect your ability to deliver? What opportunities can you take advantage of to grow revenue and market share?

Define Your Objectives
Once you have a good handle on where you should be targeting your efforts, you need to define a succinct list of objectives that will serve as an umbrella and guidepost for your marketing activities. You should never have more than six objectives so you do not dilute your focus. Each objective should be measurable and achievable. Saying you want to sell widgets in North America is not a good objective. Stating that you want to sell 1,000 widgets to Widget Executives in California is much better.

Once you have defined your objectives, you can develop goals that support each objective, like pillars on a stool. Each goal is a specific action or series of actions that will carry out your objective. Actions are best framed in an activity plan. This is usually an Excel spreadsheet that identifies the activity, the objective it supports, the person responsible, when it is due, and how much it will cost. Activity plans can consist of multiple layers. Each activity can have sub-activities that are assigned to a different person. But at the end of the day, all the activities roll up into the initial objectives. Activity plans also consist of sales forecasting by service, product, and channel.

Advertising plans identify where you will be buying media and what objectives and goals the buy supports. Merchandising and promotional plans outline key promotions and other items that can support related goals and objectives. A solid public relations plan identifies where you will be looking to drive impressions and how each PR outlet will support a goal and objective. Finally, your demand generation plan consists of all of the lead generation efforts you will be conducting, which objectives they support, and how you will measure and account for results.

Synchronize Sales and Marketing
Good plan management involves getting both sales and marketing departments to agree on the goals and objectives of the marketing plan and to have clear visibility into its execution. Plans should be managed and updated on a regular basis, always monitoring for results and changes that need to be made. No business works in a vacuum.

Marketers will be required to make changes and additions from time to time and make tradeoffs on certain events. However, just because you have to change direction doesn't mean you throw out the map.

Measure Success, Justify Your Budget
Plans should have tight budgets and solid controls for measuring the effectiveness of each objective. As marketers start to plan and manage their activities and justify their spending, demand generation will improve. A great marketing plan can lead to a great campaign, but neither will be "great" to your executives until you can show their effect on the targeted audience. A solid demand generation solution can show both marketing and sales departments which portions of campaigns led to action by prospects and can even measure how much revenue each particular initiative has resulted in. This is important when seeking an increased marketing budget for future campaigns.

Marketing has entered a new age with the combination of creativity, technology, and accountability. A great marketing plan, along with a demand generation solution to executive, automate, and measure much of the ensuing marketing campaign, will direct well-thought-out messages to the right people...and you'll be able to prove it.

Texting to Profits

Consumers are more open to text message and mobile marketing than most companies know; some name brand businesses are taking advantage of this developing medium.

by Colin Beasty

Seventy-nine percent of consumers find mobile ads annoying, but early efforts at mobile marketing reveal that consumers will happily engage in campaigns if the information is relevant and valuable. According to a new report released by Forrester Research, "Is the US Ready for Mobile Marketing?," a growing number of consumers are shifting from voice-only mobile services to other activities, creating an audience for mobile marketing.

Thirty-five percent of U.S. households that own a mobile phone currently engage in text messaging and 11 percent access the mobile Internet, according to the report. To combat the preconditioned skepticism surrounding phone-based marketing, marketers must recognize that mobile marketing is about offering value, not interrupting consumers with unmoving and irrelevant ads, or bombarding them with mass advertising.

"To avoid the perception of mobile spam, marketers must work with the unique elements of the mobile channel itself and the relevance of their message," says Christine Overby, principal analyst at Forrester Research and coauthor of the report. In contrast to other channels, mobile phones are highly integrated into people's daily activities and physical environment, she says. "This means that marketers can embrace the real-world connections with relevant location-based services and campaigns that tie mobile and on-premise advertising."

Overby says a number of forward-looking brands have already successfully employed multimedia messaging, mobile Web browsers, and downloadable applications and content to reach consumers via mobile phones. McDonald's placed mobile ads on Web sites like Match.com, and saw higher-than-average click-through rates due to a highly relevant offer: mobile coupons valid between 9 p.m. and 4 a.m. Overby also points to Broadway Marketplace, a small Cambridge, MA, grocer, that replaced its card-based loyalty program with one that uses mobile phones to identify the shopper.

This approach allows Broadway Marketplace to deliver promotions based on a shopper's purchase history directly to that shopper's mobile phone. Eighty-two percent of Broadway's shoppers now belong to this program, with 64 percent taking part on a regular basis.

"Broader data adoption is finally providing marketers with a real opportunity to reach customers, particularly the young and socially connected," Overby says. "But marketers must adopt to a more nuanced campaign approach in order to reach these consumers due to the highly personal and intrusive nature of the mobile medium."