Robert Desisto » SaaS

2011 Sales Force Automation Magic Quadrant Released

Robert Desisto — Mon, 18 Jul 2011 14:42:51 +0000

Check out the 2011 Sales Force Automation Magic Quadrant (released on July 15th, 2011). Mobility continues to grow in importance for users; therefore, it has also become a more critical component of our evaluation criteria for the sales force automation (SFA) Magic Quadrant. Smartphones and iPads (see “iPads: Customer-Facing Selling Will Drive iPad Use for Sales” and “iPads: Their Impact on the Top Six Sales Processes”) are becoming preferred devices for the mobile salesperson. Software as a service (SaaS) also continues to play a more dominate role in the SFA Magic Quadrant, with Microsoft Dynamics CRM Online and Zoho added for 2011. Based on Gartner inquires during the past 12 months, new SFA evaluations are up by 30%. The primary objective for most sales organizations remains opportunity management, but we have also seen greater emphasis placed on sales effectiveness and sales-performance-related applications. We outline strengths and cautions for all of the SFA vendors in the quadrant.

Amazon’s Cloud Outage Should Cause Pause

Robert Desisto — Fri, 22 Apr 2011 02:34:49 +0000

While some may write that companies should have gotten better Service Level Agreements with Amazon, I ask does it really matter with such a long outage? Can a SLA really repair damage to your business? Just imagine having your customer contact center in the cloud being down for 20 hours. I am sure your customers would gain comfort knowing your company has a good SLA. I am not here to say Amazon’s outage will cause the death of cloud computing, but to explain away the obvious with long written explanations of zones, regions, etc, is good information of what happened but avoids the obvious issue. We need to show pause rushing to the cloud especially the more mission critical the application is to the business.

One CEO posted the following on their web site to their customers today:

We are unfortunately still down. This is beyond frustrating for us as well… as you can imagine. This has been a widespread, day-long outage that you may have seen reported in the media. Amazon Web Services has been experiencing major issues with failures on multiple levels.

These issues have taken down thousands of major sites with it. This outage has affected us as well as a number of other related sites.

We have a new server up that is restored from our backups, but it would mean losing almost an entire day’s worth of data. Our hope is that we can wait a bit longer for Amazon to get its act together and be humming back along with zero data loss. Worst case scenario at this point is sometime tonight or early AM we make the call to go back to the backups and things will be back to normal (minus yesterday’s data, which would need to be re-input)

We are very sorry for the problems and wish there was more we could do.

The lesson for today is not about Amazon although there are important tactical considerations we have learned. What is more important is to understand cloud outages do and will happen in the future. We have published a number of good research notes on mitigating risk but there is no way to completely avoid risk. However, taking pause and evaluating which applications you are willing to move to the cloud knowing there will be unmitigated risks is something we should all take greater care in doing.

Does your vendor Support SaaS? Who Cares

Robert Desisto — Wed, 01 Sep 2010 20:43:15 +0000

My favorite inquiry from a client is, “Does vendor X support SaaS? “. I respond by first going through the Gartner SaaS definition. I then make a determination. After which I say, who cares. I tell the client it is more important how a vendor supports specific components of SaaS . I just published a research note: Four Components Define Software as a Service. SaaS must be service-based, shared, scalable, and paid for on a subscription or pay for use basis. The details on how a vendor achieves these components vary. The research note provides good context to the real questions you should consider when evaluating a vendor who is offering SaaS.

Avoiding Expensive SaaS Contracts

Robert Desisto — Fri, 12 Feb 2010 16:28:03 +0000

I have seen wide variations in SaaS contract pricing (30% to 40%) from customers with similar user subscription numbers, application needs and term lengths. There is always the potential to have SaaS price variances based on geographic location, SaaS vendor account executive selling skills or contract timing in a vendor’s fiscal year. However, there are more-critical factors beyond these that can dramatically affect subscription pricing.

Some of the key factors contributing to these expensive SaaS contracts are companies needlessly signing vendor price confidentiality agreements limiting their negotiation power, beginning contract renewal talks a month before the contract termination date, or negotiating large ELAs with no hope of ever reaching the subscribers numbers to make the deal cost worthy.

A newly Gartner published research note entitled: How to Avoid Expensive SaaS Contracts – R.DeSisto, provides 6 best practices to reduce SaaS contract expenses. If you are in the process of signing a new contract or renewing existing one it is a must read.

Software as a Service Sales Force Automation Prices Are Eroding

Robert Desisto — Thu, 05 Nov 2009 19:44:35 +0000

Will Software as a Service or Cloud Computing erode prices in business application markets? If sales force automation is an indicator the answer is yes. Just this week Microsoft announced both a price cut and special promotion for its Microsoft CRM Dynamics Online offering. (see Gartner Research Note – Microsoft Reduces Prices to Win CRM SaaS Business published today) I also have routinely have seen discounts in the 40 – 60% range on customer SaaS Sales Force Automation deals this year for all providers.

The main issue is core sales force automation is commodity. Automating the management of opportunities, contacts, and activities has been around for over 20 years. Once functionality hits a level of commodity status, price becomes a key factor. This market dynamic will place heavy emphasis on a SaaS vendor’s ability to scale its operations and lower its per user cost to serve metrics to maintain margin targets. Those providers who have underinvested in operations will not be in position to be competitive in what will continue to be a very price sensitive market.

Are You Having Difficulty Managing Software as a Service?

Robert Desisto — Thu, 29 Oct 2009 13:33:02 +0000

This past month 20% of my customer inquiries came from CIOs and their supporting staff asking how to fix poorly negotiated SaaS contracts or respond to new business requirements for SaaS services. In many cases, the IT organization’s first exposure to SaaS is when problems occur. Rather than solve each problem as it occurs, I recommend getting in front of the SaaS Curve.

Early generations of SaaS were often implemented on an island, with little integration, configuration and customization requirements. This enabled business executives to drive the deployment of the software without involving the IT organization. SaaS is now being leveraged to handle more-complex business requirements, which requires more configuration and integration outside the domain expertise of the business administration professional. The business organization is not equipped with procurement, vendor management, and software deployment skills to support increasing complexity. Gartner’s SaaS Readiness Assessment Checklist (See Gartner Research Note – Use the SaaS Readiness Assessment Checklist Before Deploying Your SaaS Solution) will ensure that you’re in a position to manage the life cycle of a SaaS contract. The checklist focuses on specific issues such as security, disaster recovery, governance policies and vendor management protocols as they relate to SaaS. Whether you have already implemented a SaaS solution or not, the checklist will provide guidance of where you need to be as an organization to support SaaS initiatives.

Cloud Computing and SaaS: Disaster Waiting to Happen?

Robert Desisto — Thu, 22 Oct 2009 03:06:24 +0000

At Gartner US Symposium today, I asked an audience of roughly 700 people if they had disaster recovery commitments from their Cloud or SaaS provider. One person raised their hand! Maybe we should focus a little less on exploiting the “phenomenon” and more on inspecting the “nuts and bolts” of a Cloud or Saas provider’s operations such as making sure they provide disaster recovery objectives. External certification in the form of a SAS 70 Type 2 audit is helpful, but by no means sufficient to ensure that customer recovery-time objective (RTO) and recovery-point objective (RPO) service levels can be met. My colleague John Morency authored an important research note (Critical Recovery Questions to Ask SaaS Providers) on this topic and is a must read

Beware of Cloud and SaaS Huggers

Robert Desisto — Tue, 29 Sep 2009 19:46:36 +0000

Are you annoyed as much as I am when analysts and pundits stop at no end to espouse the benefits of cloud computing or SaaS without providing the downsides or risks? We all have all seen the behavior. Cloud Huggers are the first to blog when a negative press event comes out about a cloud outage, or security breach. They are also first to create analysis that discuss business drivers but conveniently leave out inhibitors.

The reality is SaaS and Cloud Computing has value and a place. SaaS and Cloud computing also have issues that should not be swept under the rug. It is imperative that both value and challenges are weighed when considering cloud computing and SaaS. At US Symposium in Orlando, Florida, I will be presenting: “Software as a Service’s Uncertainties Revealed” (October, 20^thTuesday, 5 PM – 6 PM). Rather than stand on stage and give a “rah, rah” presentation stating SaaS will take over the world (something you can get for free by looking at most cloud computing or SaaS vendor websites), my goal is to make sure everyone in the room walks away with a pragmatic view of the role SaaS will play in their IT future with a focus on the relevant trade-offs of SaaS versus on-premises deployments. The presentation will open in a court room style drama where I will present the vendor case for SaaS. I will then cross examine the vendor points, and ultimately reach a verdict. Cheaper, quicker, more innovation are just a few of the SaaS vendor arguments I will examine. The presentation will conclude with a 4 step action plan everyone should take as it relates to SaaS.