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?
30.1.07
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.
THE BIG PICTURE
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.
LET'S MAKE A DEAL
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.
THE FEWER, THE BETTER
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.
THE GANG OF FOUR
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.
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.
THE BIG PICTURE
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.
LET'S MAKE A DEAL
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.
THE FEWER, THE BETTER
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.
THE GANG OF FOUR
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.
29.1.07
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.
VIEW REPORT
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.
VIEW REPORT
23.1.07
Salesforce.com for Google AdWords
First “Word to Close” Search Marketing Service
by Jamie Grenney
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.”
18.1.07
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."
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."
16.1.07
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
9.00 am Singapore & Hong Kong
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.
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."
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.
In another recent report, Gartner cites that 25% of new software will be delivered as software as a service by 2011.
15.1.07
A media search party to last all year
2007 is likely to be watershed year in digital media in Australia
Michael Sainsbury
sainsburym@theaustralian.com.au
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.
Michael Sainsbury
sainsburym@theaustralian.com.au
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.
12.1.07
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:
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.
11.1.07
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.
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."
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."
9.1.07
Salesforce.com's Overlooked Growth Area: Online Marketing
Susan Kuchinskas submits: The conventional wisdom about Salesforce.com (NYSE: CRM - News) is that in order to grow, it needs to continue to acquire bigger customers. The on-demand CRM provider isn’t doing badly at landing larger engagements — as well as small engagements at bigger enterprises, which could lead to continued penetration and more seats.
But it has another growth area: online marketing. While the company continues its core focus in customer relationship management, it’s quietly moving to add more and more marketing and advertising campaign management functionality to the core product.
Last October, the company brought campaign management for Google AdWords into the basic product. Now, it’s working on doing the same for Yahoo Search Marketing, as Yahoo gets its new Panama platform up to speed.
Says Kraig Swensrud, who oversees marketing programs for Salesforce.com, “The dream scenario for customers is that marketers can generate demand and nurture prospects, customer service can support them, and sales can process and track transactions, all within Salesforce.”
Salesfore.com will focus on email and search marketing, plus tracking interactions with the company website. Customers can use the application to execute, track and measure the response for email, search and direct mail campaigns. It will stay away, for now, from the more trendy media, such as blogging or video. Swensrud says most Salesforce.com customers aren’t yet doing all they can to create and nurture leads via these three established media.
The Interactive Advertising Bureau says spending on internet advertising in 2006 rose by 30 percent to $12.6 billion, and the industry is hoping for even greater growth in 2007.
Salesforce.com has close to 30,000 customers for its SaaS offerings, while an estimated 500,000 to 750,000 businesses use Google AdWords. An estimated 300,000 to 400,000 companies use Yahoo Search Marketing (although there’s likely plenty of overlap between Google and Yahoo search marketers).
Says Swensrud, “With advertising budgets shifting onto the web, it’s a great time for us as a company to be doing what we did for salespeople over the last decade: giving marketing automation tools to marketing people.”
Salesforce for Google AdWords is based on technology developed by Keiden, formerly a Saleforce.com ISV. The CRM provider thought Keiden’s technology, which lets companies buy Google AdWords from within Salesforce, and then to track exactly which ads and keywords turn into leads, deals and revenue downstream, was important enough to acquire.
The Keiden team, which came along with the acquisition, will develop the Yahoo Search Marketing integration, either independently or in collaboration with Yahoo’s engineers.
Salesforce for Google AdWords complements and extends Google’s own analytics product. Swensrud says that 90 percent of Salesforce customers use it in conjunction with Google Analytics. Google considers it a conversion when a searcher clicks on an ad and goes to the advertiser’s website. Salsforce.com lets the company follow the searcher’s interaction with the website, and also keep track of the lead to determine whether the person returns to the site a future time to make a purchase.
Swensrud says that Salesforce.com prioritizes its projects based on customer demand. In marketing, that demand so far has been overwhelmingly for Google integration. He expects demand for Yahoo integration to pick up in 2007, as Panama rolls out. So far, there hasn’t been a flicker rest in Microsoft AdCenter, he said. “It’s massively dwarfed by Google and other marketing initiatives.”
But it has another growth area: online marketing. While the company continues its core focus in customer relationship management, it’s quietly moving to add more and more marketing and advertising campaign management functionality to the core product.
Last October, the company brought campaign management for Google AdWords into the basic product. Now, it’s working on doing the same for Yahoo Search Marketing, as Yahoo gets its new Panama platform up to speed.
Says Kraig Swensrud, who oversees marketing programs for Salesforce.com, “The dream scenario for customers is that marketers can generate demand and nurture prospects, customer service can support them, and sales can process and track transactions, all within Salesforce.”
Salesfore.com will focus on email and search marketing, plus tracking interactions with the company website. Customers can use the application to execute, track and measure the response for email, search and direct mail campaigns. It will stay away, for now, from the more trendy media, such as blogging or video. Swensrud says most Salesforce.com customers aren’t yet doing all they can to create and nurture leads via these three established media.
The Interactive Advertising Bureau says spending on internet advertising in 2006 rose by 30 percent to $12.6 billion, and the industry is hoping for even greater growth in 2007.
Salesforce.com has close to 30,000 customers for its SaaS offerings, while an estimated 500,000 to 750,000 businesses use Google AdWords. An estimated 300,000 to 400,000 companies use Yahoo Search Marketing (although there’s likely plenty of overlap between Google and Yahoo search marketers).
Says Swensrud, “With advertising budgets shifting onto the web, it’s a great time for us as a company to be doing what we did for salespeople over the last decade: giving marketing automation tools to marketing people.”
Salesforce for Google AdWords is based on technology developed by Keiden, formerly a Saleforce.com ISV. The CRM provider thought Keiden’s technology, which lets companies buy Google AdWords from within Salesforce, and then to track exactly which ads and keywords turn into leads, deals and revenue downstream, was important enough to acquire.
The Keiden team, which came along with the acquisition, will develop the Yahoo Search Marketing integration, either independently or in collaboration with Yahoo’s engineers.
Salesforce for Google AdWords complements and extends Google’s own analytics product. Swensrud says that 90 percent of Salesforce customers use it in conjunction with Google Analytics. Google considers it a conversion when a searcher clicks on an ad and goes to the advertiser’s website. Salsforce.com lets the company follow the searcher’s interaction with the website, and also keep track of the lead to determine whether the person returns to the site a future time to make a purchase.
Swensrud says that Salesforce.com prioritizes its projects based on customer demand. In marketing, that demand so far has been overwhelmingly for Google integration. He expects demand for Yahoo integration to pick up in 2007, as Panama rolls out. So far, there hasn’t been a flicker rest in Microsoft AdCenter, he said. “It’s massively dwarfed by Google and other marketing initiatives.”
20.12.06
Loop Wireless appoints Martin Hoffman as CEO prior to float
Loop Wireless appoints Martin Hoffman as CEO prior to float
20 December, 2006
FOR IMMEDIATE RELEASE
(Sydney, Australia) - Loop Wireless today announced the appointment of Martin Hoffman as CEO and Managing Director in the lead-up to its proposed IPO on the ASX early in 2007.
Mr Hoffman was CEO of Ninemsn from 2003 to July 2006. In this role he consolidated its position as Australia’s leading new media company, while also rapidly growing revenue and profit. Mr Hoffman has a strong background in Australia’s new media industry. He previously held senior roles at Fairfax Business Magazines and Fairfax Digital between 1999 and 2002, including starting and building the online auction business SOLD.com.au before its sale to Yahoo! in early 2001 for $24m cash.
Loop Wireless is a leading global provider of social networking services on 3G mobile networks. Mr Hoffman said he was attracted to the role by the innovation and international potential of Loop Wireless. “I am tremendously excited by the challenge to build a global service based on Australian technology and smarts. Loop is well positioned to capitalise on both the worldwide growth in 3G mobile networks, and people’s desire to express themselves in new ways.”
Loop Wireless is a wholly owned subsidiary of AdultShop.com Ltd. On 13 December, AdultShop announced to the ASX its intention to spin-off Loop, subject to shareholder and regulatory approvals. Loop will be seeking to raise up to $5m.
Loop Wireless founder and Director of Technology and Product, Mr Ian Rodwell, welcomed Mr Hoffman’s leadership in preparation for the potential IPO. “The whole Loop team is thrilled to have Martin join us. His experience and achievements in new media, including at Ninemsn will give us a huge boost,” said Mr Rodwell.
Loop’s flagship service, Kink Kommunity, operates on Hutchison 3, in both Australia and the UK as an integrated community. Loop is in advanced discussions for the rollout of its services with other carriers in Australasia, USA, Canada, Europe, and Scandinavia.
Mr Hoffman will commence his position at Loop Wireless effective 15 January.
End.
Media Contacts:
William Scully-Power
Sqware Peg agency On-Demand
Tel: +61 400 828 866
Martin Hoffman
CEO
Loop Wireless
Tel: + 61 407 123 692
About Loop Wireless
Loop Wireless is a company focused on delivering mobile media and user-generated services to global consumers within the youth and young adult demographics. Founded late 2004, Loop launched its first service on Hutchison 3 in Australia in September 2005.With its principals having over 20 years experience delivering creative multimedia solutions in global markets, Loop Wireless combines product development and product marketing expertise, creating a significant mobile media company.
Loop’s flagship product is Kink Kommunity.
Current functionality includes:
· Post your own video, photos, and interact with other Kink subscribers through text.
· Kink Global – Real time interaction with other Kink territories via instant chat
· Kink Profile – Create an in depth profile, post about yourself, create tags for others to search and post video and photos for others to view.
· Friends list – Create a list of all your friends on Kink, you can even see who’s online!
· Search – Search for your favourite Kink subscribers or search for other Kink subscribers with similar tastes with tag search.
· Private Messaging - Peer to peer messaging within the myKink Section.
· Relax and read up on all the latest celebrity goss, music news, and movie releases with KinkZine. You can even have your say on KinkZine articles!
Kink Kommunity generates 20 minute average session times on the Hutchison 3 network, making it one of the most engaging mobile data services available.
Loop Wireless was Winner of the 2006 ‘Australian Interactive Media Industry Association’ award for Best Wireless/Mobile Product - Kink Kommunity on 3 Mobile.Visit our website at www.loopwireless.com
About Martin Hoffman
Martin Hoffman was CEO of Ninemsn from January 2003 until July 2006. Ninemsn is a 50:50 joint-venture between PBL Media and Microsoft, and is Australia’s leading internet content and services business. Under Martin’s leadership, Ninemsn grew revenue four-fold, and went from loss-making to earning over $30m in EBIT in FY06. Ninemsn has also expanded strongly into the mobile content arena, with Martin driving acquisitions of 5th Finger Pty Ltd and HWW Ltd in the last year.
Martin previously held senior roles at Fairfax Business Magazines and Fairfax Digital between 1999 and 2002, including starting and building the online auction business SOLD.com.au before its sale to Yahoo! in early 2001 for $24m cash. He has prior experience at Optus Communications, Potter Warburg and PA Consulting Group.
He is a director and honorary treasurer of the Garvan Institute of Medical Research, and a director of the Sydney Film Festival.
Martin holds an MBA(Honours) from the Institute for Management Development, IMD, in Lausanne, Switzerland; as well as Master of Applied Finance and Bachelor of Economics degrees from Macquarie and Sydney Universities respectively.
20 December, 2006
FOR IMMEDIATE RELEASE
(Sydney, Australia) - Loop Wireless today announced the appointment of Martin Hoffman as CEO and Managing Director in the lead-up to its proposed IPO on the ASX early in 2007.
Mr Hoffman was CEO of Ninemsn from 2003 to July 2006. In this role he consolidated its position as Australia’s leading new media company, while also rapidly growing revenue and profit. Mr Hoffman has a strong background in Australia’s new media industry. He previously held senior roles at Fairfax Business Magazines and Fairfax Digital between 1999 and 2002, including starting and building the online auction business SOLD.com.au before its sale to Yahoo! in early 2001 for $24m cash.
Loop Wireless is a leading global provider of social networking services on 3G mobile networks. Mr Hoffman said he was attracted to the role by the innovation and international potential of Loop Wireless. “I am tremendously excited by the challenge to build a global service based on Australian technology and smarts. Loop is well positioned to capitalise on both the worldwide growth in 3G mobile networks, and people’s desire to express themselves in new ways.”
Loop Wireless is a wholly owned subsidiary of AdultShop.com Ltd. On 13 December, AdultShop announced to the ASX its intention to spin-off Loop, subject to shareholder and regulatory approvals. Loop will be seeking to raise up to $5m.
Loop Wireless founder and Director of Technology and Product, Mr Ian Rodwell, welcomed Mr Hoffman’s leadership in preparation for the potential IPO. “The whole Loop team is thrilled to have Martin join us. His experience and achievements in new media, including at Ninemsn will give us a huge boost,” said Mr Rodwell.
Loop’s flagship service, Kink Kommunity, operates on Hutchison 3, in both Australia and the UK as an integrated community. Loop is in advanced discussions for the rollout of its services with other carriers in Australasia, USA, Canada, Europe, and Scandinavia.
Mr Hoffman will commence his position at Loop Wireless effective 15 January.
End.
Media Contacts:
William Scully-Power
Sqware Peg agency On-Demand
Tel: +61 400 828 866
Martin Hoffman
CEO
Loop Wireless
Tel: + 61 407 123 692
About Loop Wireless
Loop Wireless is a company focused on delivering mobile media and user-generated services to global consumers within the youth and young adult demographics. Founded late 2004, Loop launched its first service on Hutchison 3 in Australia in September 2005.With its principals having over 20 years experience delivering creative multimedia solutions in global markets, Loop Wireless combines product development and product marketing expertise, creating a significant mobile media company.
Loop’s flagship product is Kink Kommunity.
Current functionality includes:
· Post your own video, photos, and interact with other Kink subscribers through text.
· Kink Global – Real time interaction with other Kink territories via instant chat
· Kink Profile – Create an in depth profile, post about yourself, create tags for others to search and post video and photos for others to view.
· Friends list – Create a list of all your friends on Kink, you can even see who’s online!
· Search – Search for your favourite Kink subscribers or search for other Kink subscribers with similar tastes with tag search.
· Private Messaging - Peer to peer messaging within the myKink Section.
· Relax and read up on all the latest celebrity goss, music news, and movie releases with KinkZine. You can even have your say on KinkZine articles!
Kink Kommunity generates 20 minute average session times on the Hutchison 3 network, making it one of the most engaging mobile data services available.
Loop Wireless was Winner of the 2006 ‘Australian Interactive Media Industry Association’ award for Best Wireless/Mobile Product - Kink Kommunity on 3 Mobile.Visit our website at www.loopwireless.com
About Martin Hoffman
Martin Hoffman was CEO of Ninemsn from January 2003 until July 2006. Ninemsn is a 50:50 joint-venture between PBL Media and Microsoft, and is Australia’s leading internet content and services business. Under Martin’s leadership, Ninemsn grew revenue four-fold, and went from loss-making to earning over $30m in EBIT in FY06. Ninemsn has also expanded strongly into the mobile content arena, with Martin driving acquisitions of 5th Finger Pty Ltd and HWW Ltd in the last year.
Martin previously held senior roles at Fairfax Business Magazines and Fairfax Digital between 1999 and 2002, including starting and building the online auction business SOLD.com.au before its sale to Yahoo! in early 2001 for $24m cash. He has prior experience at Optus Communications, Potter Warburg and PA Consulting Group.
He is a director and honorary treasurer of the Garvan Institute of Medical Research, and a director of the Sydney Film Festival.
Martin holds an MBA(Honours) from the Institute for Management Development, IMD, in Lausanne, Switzerland; as well as Master of Applied Finance and Bachelor of Economics degrees from Macquarie and Sydney Universities respectively.
14.12.06
CeBIT "Internet Applications" Archived Webcast
Click on the link below to view the archived webcast on "Internet Applications" from CeBIT Australia.
http://play.viostream.com/?play=5F866AAD-D72B-4EDB-AA0C-990C6652D4B8
Doug Farber, VP, Operations (Asia-Pacific) - Salesforce.com
Mark Rainbird, Chief Operating Officer - Webcentral
Moderator: Brad Howarth, Freelance Journalist (The Sydney Morning Herald)
http://play.viostream.com/?play=5F866AAD-D72B-4EDB-AA0C-990C6652D4B8
Doug Farber, VP, Operations (Asia-Pacific) - Salesforce.com
Mark Rainbird, Chief Operating Officer - Webcentral
Moderator: Brad Howarth, Freelance Journalist (The Sydney Morning Herald)
7.12.06
Merry Christmas from agency On-Demand!
agency On-Demand™ is a boutique agency that specialises in outsourced marketing, PR and lead generation campaigns for salesforce.com customers.Each campaign is set-up, executed and measured all from within your instance of salesforce.com. Campaign Services Include: Search Engine Marketing (Google Adwords), Direct Marketing (mail, email, fax, sms), Landing Pages and Surveys, Webinars, Telemarketing, Public Relations and Event Management.
agency On-Demand™ is a division of Sqware Peg, the leading Asia-Pacific Premiere Consulting Partner of salesforce.com (NYSE:CRM) and the leading provider of on-demand customer relationship management (CRM) services and solutions. For more information, please visit www.sqwarepeg.com
Keep on top of the latest On-Demand CRM trends at http://sqwarepeg.blogspot.com/
5.12.06
Salesforce.com seeks Office Manager for Sydney Office
http://www.salesforce.com/company/position.jsp?id=a01000000005hOdAAI&Post_to_Web__c=true
Position
Office Manager
Location
Sydney, Australia
Description
This individual will report to the Director of Real Estate and Facilities and will be responsible for the smooth running all aspects of day-to-day office operations of our Sydney office through the management of administration and facility management.
Responsibilities
Manages the company's office services which include office services suppliers (supplier selection, contract negotiations, quarterly business reviewed) copy services, mail and distribution services, records retention, office reception and support services, receiving and shipping services, ARC staff, contract file management, new hire orientation for office services, Badging services and more. Will oversee general administrative staff and services both at head office, set-up of new offices and local office services suppliers.
Will coordinate with necessary temp services vendors to meet organizational needs for temporary administrative staff. Selects, develops, and evaluates personnel to ensure the efficient operation of the function.
Required Skills/Experience
Position
Office Manager
Location
Sydney, Australia
Description
This individual will report to the Director of Real Estate and Facilities and will be responsible for the smooth running all aspects of day-to-day office operations of our Sydney office through the management of administration and facility management.
Responsibilities
Manages the company's office services which include office services suppliers (supplier selection, contract negotiations, quarterly business reviewed) copy services, mail and distribution services, records retention, office reception and support services, receiving and shipping services, ARC staff, contract file management, new hire orientation for office services, Badging services and more. Will oversee general administrative staff and services both at head office, set-up of new offices and local office services suppliers.
Will coordinate with necessary temp services vendors to meet organizational needs for temporary administrative staff. Selects, develops, and evaluates personnel to ensure the efficient operation of the function.
Required Skills/Experience
- Bachelors degree
- 1 to 3 years experience of office management or facilities operations experience
- Program / Project Management skills
- Highly organized and detail oriented, with the ability to multi-task
- Excellent interpersonal and communication skills, both verbal and written
- Knowledge of Life Safety and running Life Safety teams in a corporate environment.
4.12.06
High Performance Demand Creation WEBINAR!
Learn how to use new marketing automation tools to supercharge your lead generation and sales efforts.
Sqware Peg agency On-Demand has teamed up with Eloqua, a leader in demand generation automation, to bring you this forward-looking webcast: High Performance Demand Creation.
During the webcast you will learn how companies like yours have:
Sqware Peg agency On-Demand has teamed up with Eloqua, a leader in demand generation automation, to bring you this forward-looking webcast: High Performance Demand Creation.
During the webcast you will learn how companies like yours have:
* Measured marketing programs to identify and repeat best performing campaigns
* Automated marketing campaigns to improve productivity without adding additional staff
* Improved lead quality and conversion rates
Webcast & Speakers:
High Performance Demand Creation
Tuesday December 12th, 11:00am-12:00pm (Sydney)
Steve Gershik, Director of Marketing Innovation, Eloqua
William Scully-Power, Marketing Success Manager, Sqware Peg agency On-Demand
All attendees will receive a copy of Jill Konrath's eBook, What Sales Really Needs From Marketing
Register TODAY by calling Will Scully-Power on +612 9299 9001 (ext 105) or email will@sqwarepeg.com
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