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Inside Ball

59 Posts

Is SaaS Up or Down?

Posted by emoltzen Sep 11, 2009

Enterprise Content Management company Digitech Systems says it has conducted a survey of VARs on the topics of SaaS and ECM, and came away with some counterintuitive findings, according to an e-mail from one of the company's public-relations representatives.


According to the e-mail, those findings include:


"Resellers are NOT selling more SaaS in the down economy."


"iPhone Applications are hot and resellers believe that end users are interested in using them in their business."


"Resellers believe that end users will purchase more technology that proves ROI and helps them do more with less." (Again, the "more with less" theme steps forward.) Complete data from Digitech wasn't immediately available.


While SaaS is a hot topic of conversation, this isn't the first batch of research to show it's not translating into hard sales for the industry. As we saw earlier this year, Forrester Research found that three out of four enterprises either had no idea what cloud computing was, or they couldn't afford it, or they didn't want it.


From your perspective, are there any signs that Software-as-a-Service or cloud computing are gaining any hard, real-world momentum or are we still in a hype cycle?

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AT&T Wireless made a big deal yesterday out of plans to upgrade six U.S. cities to its High Speed Packet Access (HSPA) 7.2 technology, which sounds impressive until you look at the provider's coverage map.


There are still broad areas of the U.S. in the West that are without AT&T coverage, and the map fails to mention that large areas that do have coverage aren't yet 3G-enabled. This is a company that has monopoly service rights to the fastest-selling smart phone in the U.S., the iPhone, and one of the tightest strangleholds on the wireless Internet access market.


Upgrading cities is fine. But bringing coverage to the West, 3G coverage to rural areas and better service to everybody should be part of the deal.   In its announcement, AT&T brags:


"The upgrades are part of AT&T’s ongoing efforts to drive innovation and investment to lead the industry in delivering the benefits of smartphones and mobile broadband for customers. More smartphone customers have chosen AT&T over any U.S. competitor, resulting in wireless traffic on the AT&T network that has quadrupled over the past year. This growth includes a volume of smartphone data traffic over the AT&T network that is unmatched in the wireless industry."


And without a monopoly on iPhone service, how would all that have gone down?


Yesterday's announcement is nice for the folks who can get the benefits. But because of everybody who is still left out while AT&T counts its iPhone-related service revenue, it's nothing to brag about.

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Apple and Expectations

Posted by emoltzen Sep 9, 2009

Steve Rubel has started a discussion on Friendfeed about Apple's press briefing today, saying it failed because the Cupertino, Calif.-based company didn't live up to the hype.


Some expected Apple would announce The Beatles' catalog would now be available on iTunes. Didn't happen. Some thought Apple would announce a tablet or netbook. Didn't happen, either.   

 

I responded there, and will repeat it here:

 

"The speculation about an Apple tablet came from an analyst who admitted it was just speculation. But that was enough for lot of people to bank on it as if it were a fact. If Apple had to deny every incorrect rumor, it'd have to hire its own PR agency just for that. Still, I don't think the event was a fail because it was pretty huge that Jobs ran the show himself."    

 

Apple isn't always innocent. Last year, Apple did hype MobileMe - and when it launched it turned out to be quite the flop. Most of the time, though, Apple outsiders are doing the hyping.


What the press got to see today was Steve Jobs being Steve Jobs: talking about Apple products, pointing out new features that the company thinks will be big, and holding attention at center stage. Given that there was quite a bit of speculation and hype about Jobs' own health (some true, some not), you would think that's enough for now.

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A key differentiator between netbooks and notebooks is that notebooks, by and large, provide a lot more internal storage than netbooks.


Western Digital, with an announcement today, may be pushing that delta yet wider.  The company rolled out its WD Scorpio Blue 640-GB hard disk drive in industry-standard 9.5mm, two-disk form factor.


This is a big deal, given the ever-growing need for capacity as the universe of available, high-quality digital media continues to expand.   While it's true that manufacturers could find a way to build netbooks with these drives, the price tag set by Western Digital is $149. That's not much for a drive of that capacity, but it's probably too expensive to be economically realistic for netbooks which, to be competitive, can't usually be priced at more than $350 or $400.


Predictions of a continued explosion in netbook sales have been dominating discussion in this area. But as the economy rebounds, and the market's taste for more graphics and media expands, so will the need for on-board storage.


It's difficult to see how netbooks can keep up with that -- especially when vendors like Western Digital are providing weapons to OEMs and system builders like their 640-GB capacity drive. If we see more high-capacity, mobile drives, it will help notebook sales and hurt netbook sales -- unless storage pricing somehow craters. There are no signs of that happening.

 

Western Digital's announcement is a good sign for notebooks.

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Intel has been among the companies out in front of the push to bring health care into the 21st century and has been since the company created an entire business unit to work on the issue.


In all of the debates over health care in the U.S., it's simply amazing that some of the common-sense approaches advocated by Intel and others in the industry aren't receiving more focus.


For example, spend a few minutes and look at this video posted on Intel's Web site. In the video, a doctor, referring to the integration of digital health-care technology at his small practice, says:   "There are four of us in our practice. We probably see about 30 patients apiece, a day. We see about a patient every five minutes. I can do more in that five-minute time frame, more for the patient. I think it will save time ... probably save money. More important, it's quality - it's absolutely (about) quality."


Hospital administrators that adopt holistic technology strategies are pushing profit margins. In the video, one says her hospital is seeing greater than 30 percent profits after integrating newer digital care and record technology throughout the organization.


It seems like common sense, and it's a wonder why digital technology integration doesn't get a higher profile in the effort to make health care better.

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If you thought Google's problems with Gmail over the past few months may be enough to keep everyone out of the company's Software-as-a-Service path to the channel, you’d have thought wrong.


Isos Technology, a Tempe, Ariz.-based solution provider, says it has signed up for the Google Apps Authorized Reseller program. (You can read more about the Google VAR program here.)


According to the press release announcing the partnership, the folks at Isos say they like the Google offering and point to the fact that it's hosted as a big advantage. That goes to the notion of cloud computing as a killer solution -- since it takes out a lot of infrastructure cost for customers and makes information technology, in essence, a utility.


However, the hosted model isn't yet an exact science as Google painfully suggested last week during its most recent widespread Gmail outage.  But for many customers, cloud-based applications make sense and Google has adopted a market-leading approach to hosted productivity software. Winning over solution providers to its channel program, even if it's only one at a time, is certainly a good sign.


Outages don't help, but channel partners can do Google a world of good by bringing hosted solutions to the right customers and educating them about how strong those solutions can be -- but also educating them about their limitations.


As a solution provider, would you consider Google's channel program?

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When Microsoft wanted to launch its new search engine (or, as some call it, a "decision engine,") Bing.com, the Redmond, Wash.-based company threw a reported $100 million marketing campaign behind it.

 

The software giant has desperately wanted to eat into Google's share of the search and online advertising space and, initially, the results seemed to get it a huge amount of attention and Internet traffic.

 

Fast-forward to today, and it looks as if that early success might now be a fleeting memory. According to analytics site Alexa.org, the trend shows that Google.com is now slightly growing page view count while Bing's has begun to decline.

 

So my question to you: If you were Microsoft CEO Steve Ballmer, how would you have spent that $100 million that went toward Bing marketing?

 

This chart, below, shows Google page views in red and Bing page views in blue, according to measurements by Alexa.org.

 

bingvgoogle.JPG

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European antitrust officials are taking their sweet time in evaluating Oracle's proposed $7.4 billion acquisition of Sun Microsystems, and this piece by Brenon Daly suggests it could take a lot longer if a decision isn't forthcoming by Sept. 3.


The channel and VAR customers want to know the real impact of the Oracle takeover of Sun in terms of product offerings, pricing, programs and R&D. Oracle and Sun executives, it appears, want to talk about it, too.


But nobody wants to annoy EU officials or give them any reason to ask more questions, so the information flow about what will happen with the proposed deal has all but stopped.  One of the worst enemies to the working solution provider is a lack of information, and the EU's slow process is hurting, not helping here.


VARs need to start having conversations with their customers about next year -- in fact, many of those conversations have already begun. Will an Oracle-Sun offering be the way to go? How about an IBM offering with DB2?  At the time Oracle and Sun executives announced the deal, they also announced that they believed the acquisition would close this summer. Well, summer is almost over, and so is budget planning for 2010 in many corners of the IT market.


Is the EU hurting the market, and solution providers, by dragging its feet on approving or rejecting the Oracle-Sun deal? From this angle, it doesn't appear to be helping.

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DisplaySearch throws a bit of good news our way on Thursday morning:


"According to David Hsieh, Vice President of DisplaySearch, 'July was a record-breaking month for large-area TFT LCD panels in several segments, including total shipments, shipment area, notebook PC, LCD TV and mini-note panel shipments. This indicates strong recovery in end-market demand and increased utilization at panel makers.'


"Hsieh added, 'Panel prices continued to rise in July, and revenues will increase again in August as shipments continue to grow. Despite the price increases, OEMs and brands are building inventories for the coming holiday season. DisplaySearch believes it is very important to watch inventories carefully in September, especially for LCD monitor and LCD TV panels.' "


Inventory builds are a leading indicator of economic activity - - although they are often not the best leading indicator. But technology vendors have been saying for months that their inventories have been at seasonally low levels; in what's probably the most conservative environment in the history of information technology, any kind of inventory increases would have to be taken as a positive sign. As Hsieh points out, what happens with inventories in September will be a pretty big deal.


What are you seeing with product availability, inventories and pricing?

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Salesforce.com launched a new VAR program, trying to entice the channel to begin pushing its cloud-based CRM applications and more. (Via Techcrunch.)  You can read details of the program here. (PDF)


Essentially, Salesforce says that there’s no cost to join the VAR program but at least one person inside a VAR organization must receive certification on its Force.com platform through Salesforce.com's Partner University.


Salesforce's moves come as other companies are making moves to give their cloud initiatives a boost. NetApp announced a bunch of changes and enhancements on Tuesday, and Amazon recently slashed pricing on its subscription-based cloud offerings.


All this adds up to questions as to whether cloud computing will simply reach much-predicted growth rates organically, or whether vendors are getting antsy. Forrester Research, for example, has said that it found in its own study this year that three out of four businesses either don't want to move to cloud computing, can't afford to move there or have no idea what cloud computing is.


Is Salesforce.com's new VAR program enticing? Are customers talking to their solution providers in a serious way about moving to cloud-based applications? Or is this another example of the hype machine outrunning the market?  We'll know more as the weeks and quarters move along.

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Collaborate Or Die

Posted by emoltzen Aug 25, 2009

We've posted my review of IBM's LotusLive Engage application -- a service I recommend as a nice collaboration and live meeting technology. The review speaks for itself, but there are some additional issues that should get people thinking and planning:


- The business reality of collaborating with partners inside and outside a company can't be ignored any longer. Companies hire consultants and contractors, and those consultants and contractors need a lot of information and intellectual property to get their jobs done. But they don't need all of a company's information and intellectual property. Applications and solutions need to give businesses the flexibility to share what they want and secure what they need, while providing maximum teamwork and collaboration.


- Social media is changing use patterns, and technology will have to address that. It doesn't matter whether you think Twitter and Facebook are a waste of time. Solutions and technologies that don't factor in those use patterns won't succeed. Having a contact's Rolodex information isn't enough. Seeing their photo, maintaining presence awareness, being able to contact them immediately by phone, e-mail, instant message or SMS is essential. Making yourself available that way is also essential.


- Businesses that don't reach maximum collaboration will lose out to businesses that do. If I can get six contractors into a meeting on 20 minutes notice, share updated blueprints and project specs, and work around problems at a construction site but my competitor can't, there's a good chance I'll win a lot more bids than my competitor.


New technologies and services are addressing this, and quickly.  Do you think it's time to move past the question over whether or not social networking has value, and start building value around it as a business practice?

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There was a time, a few years ago, when people couldn't get out of the PC business fast enough.


IBM sold its PC business to Lenovo. Compaq, which didn't see a future going it alone in the PC space, sold out to Hewlett-Packard. Gateway gave up the ghost as an independent PC business and sold it to Acer.


Today, Nokia announces it's jumping into the netbook space. Later this week, we understand, a major player in peripherals will make a jump into the personal computer arena. Samsung got back into the game with notebooks months ago.


What gives? Are there executives and MBAs out there thinking to themselves: "We need to find a way into a business with 2 to 3 percent margins in a crowded segment during a down economy?"


Clearly, Nokia is hedging its bets that the netbook platform may start to eat into the smartphone business. It's offering to bundle its connectivity service with an Intel Atom-based client (read: weak performance) but won't talk about pricing, operating system, or much of anything else until Sept. 2 at its Nokia World conference.


Expect Nokia to be among several "name" vendors between now and year's end that decide to become PC vendors. Some will have channel programs and well-thought out plans. Others won't. Many will eventually quietly exit the business. We've all been through this before.


What do you think? Is this good for the industry to get so crowded, in such a low-margin area, at this time in our economy?    I'm not hearing an awful lot of regret out of former IBM executives and former Compaq executives that they're now on the sidelines.

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In an e-mail to customers of its cloud-based hosting service, Amazon.com said today that it's slashing pricing on a key element of its service:


"We wanted to let you know that, starting today, we have lowered the one-time fee for all Amazon EC2 Reserved Instances by 30%. We continuously strive to be more efficient, and to pass cost savings on to you in the form of lower prices. With Linux Amazon EC2 Reserved Instances, you could reduce the cost of your instance usage by up to 56 percent compared to an On-Demand instance. When using Reserved Instances, you pay a low, one-time fee to guarantee capacity for each instance during a 1 or 3 years period. You then have the option to run that instance whenever you want, at a greatly reduced hourly rate."


On its Web site, Amazon describes its "Reserved Instance" offering as having "the option to make a low, one-time payment for each instance you want to reserve and in turn receive a significant discount on the hourly usage charge for that instance."


An "instance" is a particular hosted server deployment. By contrast, "on-demand" instances are a pay-as-you-need plan with, as Amazon puts it, "no long-term commitments."


It's too early to say, but if Amazon -- arguably the largest and most geographically deep cloud company in the world -- is having difficulties signing customers to long-term cloud deals, and is slashing pricing as a result, the impact could be felt far and wide.

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Wired's GadgetLab Web site has published a piece by Brian X. Chen listing "7 Reasons to Avoid Windows 7."


A top reason, Chen writes, is the lack of support for direct XP-to-Windows 7 upgrades. Microsoft recommends "clean" installations, which involves saving all applications and data on another drive, wiping the PC's hard drive and installing Windows 7 fresh on the hard drive.


Chen correctly notes that this shouldn't be a huge deal, since responsible parties are backing everything up constantly anyway. But, he notes: "But we understand why this would bug many XP users. For one, it’s time-consuming. For another, many are sensitive about their data, and they don’t trust Microsoft. (We don’t blame them.) Third, if XP is working fine for you, why fix something that isn’t broken?"


We saw much the same back in February.


While I gave a presentation on this, Thursday, at XChange '09 in Washington, D.C. (you can check out the PowerPoint here), one solution provider argued that folks at Microsoft have put together a work-around making it, in fact, possible to go from XP to Windows 7 without a clean install or interceding upgrade to Vista. (The workaround would include altering the registry of the XP system, he said.)


Even if that's the case, it's not a work-around that Microsoft officially supports and, in fact, the company is recommending the "clean" installation route.  Other commentators, including  The Wall Street Journal's Walt Mossberg, have recently begun pointing out the XP-to-Windows-7 upgrade fiasco.


And other rumblings I've begun hearing this week from well-connected industry sources are beginning to cast doubt on whether Windows 7 will have any success in business accounts despite all the improvements over Windows Vista.


October, when Windows 7 launches, will bring more answers.

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Donn Atkins spent decades working for IBM during its many ups and downs, good times and bad times with the IT solution provider channel, developing programs that have ultimately lasted for years in an industry where channel programs can sometimes change with the seasons.


After a short period of retirement from IBM, Atkins is back focusing on the channel. His new firm, Paramount Global Partners, was built around the strategy of working with new tech companies to build initial channel operations and strategies for working with reseller partners. Atkins and his partner, Humberto Gonzalez, founder and former CEO of Tallard, the Latin American IT distributor, went into operation quietly about a year ago but began making the rounds at the XChange ’09 conference in Washington, D.C. this week.


After a short break following his 2006 retirement, Atkins found his way back into working with solution providers.


“I was asked to consider becoming CEO of a startup” but, he said, the time wasn’t right. “Then I was asked to sit on a board of directors, but I didn’t think that I could because if I ever did get another position, I might have to leave. Finally, they asked if I’d sit on an advisory board and I said, well, OK.”


But in that role, he said, he discovered that many startups lacked the planning and wherewithal to take the next step with a business plan: a robust, well-planned program to move from a direct sales model to channel engagement. That’s how his new firm was born. Atkins and Gonzalez began providing assessment and consulting services, as well as introductions between various startups and solution providers.


Eventually, though, the final piece that many VARs wanted to see from startups was product support. Many of the startups didn’t provide it. And that brings Atkins’ firm to its next stage: partnering with solution providers – who have software, hardware and solutions expertise – and can provide the service and support for startups that those companies can’t provide for themselves. Atkins said his company receives a percentage of revenue from the startups, while the VAR that engages on the support and service end pays nothing.


Atkins’ long career at IBM included several high-profile roles, including a stint working in the computer giant’s OS/2 operations before moving to oversee IBM’s channel sales. In 2005, CMP Channel Group - - now Everything Channel – named Atkins its executive of the year. In that role Atkins was credited with streamlining and modernizing IBM’s approach to dealing with solution providers and resellers through its PartnerWorld program, as well as helping grow IBM’s revenue through VARs.

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