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Software Business
Executive Report

January 2007

In This Issue:

Feature

Industry News

 

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Feature

How to determine if your application vendor has a roadmap for the future.Dan Matthews

By Dan Matthews - Chief Technology Officer, IFS AB

As your business changes faster and faster as market and regulatory demands continue to change, can your enterprise application keep pace?

If your enterprise application cannot change as fast as -- or faster than -- your business, it will hinder you in achieving your goals rather than helping you achieve them. This means that your application vendor must, like you, continue to make changes and improvements. Yet due to changes in the enterprise applications market, your application vendor may not be investing in the product they have sold you, or may be making changes and improvements too slowly to help you remain competitive. Two market forces are affecting the enterprise application market … consolidation and inertia. On the one hand, consolidation among application vendors has left some vendors with a large number of products that cannot all survive, and that means that most or all of them may not receive any further research and development investment. Other application vendors have invested heavily in their old and existing technology, and inertia may prevent them from evolving their applications in the foreseeable future.

Consolidation has been a well-documented trend, and is to be expected in a maturing market like the market for enterprise applications. In its wake, many products may be widowed or orphaned, having been purchased by conglomerates that may not have any stated intention to continue to invest research and development dollars in the products. Other enterprise application products have been purchased by vendors that plan to replace them entirely with a new platform, but may not have a reliable timeline for doing so.

The ownership of other enterprise applications may still be in the hands of the same company that developed them, but how do you determine if the owner intends to invest the necessary dollars to move that product forward, adding new functionality and adapting to changing technology? Particularly if a vendor has made extensive investments in its old technology and has a substantial user base, they may be reticent to make the major changes necessary to truly evolve the product.

What questions should be asked of an application vendor regarding their future plans for the products they are marketing? That depends on whether you are dealing with a collector – a company such as Oracle or Infor that has purchased a large number of applications or a unified technology company like SAP or IFS that has kept its technology more consistent over the years.

Questions for Collectors
This category includes companies like Oracle and Infor Global Solutions. Oracle became the number two enterprise applications vendor behind SAP with the 2003 purchase of J.D. Edwards and Peoplesoft. The company’s plans to replace both products with an SOA-based Fusion platform have been well-publicized, but analysts have been critical of whether Oracle has made significant progress in this regard. In the meantime, Oracle has aggressively launched various Fusion middleware products.

Infor Global Solutions became the number three enterprise application vender behind SAP and Oracle in 2006 with the purchase of SSA Global and Systems Union Group. Infor, a Virgin Islands-based company owned in turn by a San Francisco-based private equity group, now owns a number of products including Marcam, EXE Technologies, Infinium Software, Baan, Elevon, Ironside, CA Interbiz, Max International, ManMan, Mapics, Frontstep, Mercia, Clarus, D&B Software, Anael and Extensity. The company has not announced specific plans to upgrade or replace these platforms with an SOA-based product.
 How do you plan to evolve this product to accommodate the major trends in the market – including SOA?
 If an entirely new product is being promised, when will it be available? What will the process be to migrate from the old to the new platform, and how much will this cost?
 When will they have a standards-based engine within the product, and how will this be accomplished?
 How are you adapting this application to my specific industry?
 How has the company that currently owns the product gone about investing in the application? Discount the upgrade history of previous owners, as the current owner will likely have a very different posture towards the product than did the visionaries who first created and marketed it.
 To what extent is the application built with industry-standard technologies including Java and .Net? Proprietary programming languages, middleware and development tools will be harder to support as the market evolves away from them.

Questions for Unified Technology Companies
Examples of companies offering enterprise applications based on a single, unified platform include SAP and IFS. SAP’s most recent incarnation of its application was the 1992 launch of SAP R/3, which replaced SAP R/2. The new version is able to run on various operating systems including Windows and Unix. SAP has indicated that it will “decompose” its application into granular components necessary for a quality SOA, but most recently, public statements by Shai Agassi, President of SAP’s Products and Technology Group, focus more on the creation of services through the opening of “plug points” into its existing business engine. In the meantime, SAP’s next major release is not expected until 2010.
 How can this application be evolved to meet my needs as my needs change?
 What are your plans to break down your product into numerous independent, granular, components to create a fully functional SOA?
 To what extent are the features and functionality we are being shown represent products that have not yet been launched or demonstrated effective in the market?
 How are you adapting this application to my specific industry?
 Can we see some examples of companies that have dramatically changed their business – and how the business application has accommodated this change? How much of a re-implementation process is necessary to allow for business process change?

Conclusion
Selecting an enterprise application is not a lifetime commitment, but it is a commitment that will last 10 years or even longer. What with the degree of product complexity and the pressure that vendors feel to sell new licenses, the advice of “caveat emptor” has never been better!

You can count on each vendor to try to tell you what you want to hear about whatever product they are trying to sell you. They will either say that their product does what you need it to today, or they will say that it will meet your need in a subsequent release.

In the end, the best predictor of future behavior is past behavior. Vendors tend to announce their intentions to release new products well in advance. Perhaps the best way to tell if a prospective application vendor will make good on their promises is to look at the promises they have made in the past – either in public or to individual customers. Did they keep those promises, or did development timelines slide or did product roadmaps disappear entirely?

Executive Report

Parlano Announces Support for the 2007 Microsoft Office System
Parlano , a leading provider of persistent group messaging solutions, will support the 2007 Microsoft Office system. Parlano MindAlign provides 2007 Microsoft Office customers with ongoing topic-based communication among dispersed, cross-functional groups, offering the persistence of email and the immediacy of instant messaging.

“Our customers have experienced the tremendous business benefits of MindAlign combined with Microsoft Live Communication Server 2005,” said Nick Fera, Parlano chairman and CEO. “With the Office 2007 System, Microsoft provides a powerful platform for making Parlano’s persistent group chat a critical component of a unified communications environment for any organization that relies on continuous, productive, and cost-effective cross-functional team interaction. We are excited by the opportunities that working with Microsoft continues to offer our customers and our business.”

“We are thrilled with the tremendous support and excitement we are seeing from our partners around the world in support of the business availability launch of the 2007 Office system, Exchange Server 2007 and Windows Vista,” said Rob Bernard, general manager, Worldwide ISV Group, Microsoft. “Our partners play a vital role in the early adoption, development and delivery of Microsoft technologies. By working closely with partners like Parlano, we are helping to provide our mutual customers with a high-quality product, seamless technology integration, and improved user experiences.”

Parlano is a leading provider of persistent group messaging solutions. Parlano's MindAlign solutions deliver instant, intelligent and persistent group and topic-based messaging to securely connect employees, customers and partners with the right people, information and context to execute business processes more efficiently. Companies including ABN AMRO, Bank of America, Cantor Fitzgerald, Cargill, Citigroup, Deutsche Bank, Standard Chartered Bank, UBS and others rely on Parlano to utilize messaging as a strategic business tool.

Contact www.parlano.com


KANA Launches Integrated OnDemand Suite

KANA Software Inc. has released a fully integrated suite of OnDemand customer service solutions. The KANA OnDemand suite delivers the enterprise-class security, reliability and performance required for high-volume customer service operations, as well as the traditional benefits of a Software as a Service ( SaaS) solution, including lower total cost of ownership, more rapid implementation and faster time-to-value. As a result, organizations can deliver consistent, managed service across all channels, including email, chat, call center and Web self-service, more efficiently and cost effectively than ever before.

KANA’s multi-channel customer service solutions have repeatedly proven their ability to help companies significantly improve service quality, reduce costs and generate additional revenue from effective service and support interactions. To meet the growing demand for these market-leading capabilities in a SaaS delivery model, KANA introduced versions of KANA Response and KANA Response Live in 2005 in this model. Based on the success of this initial launch, and significant customer adoption, KANA is now bringing to market a full OnDemand suite of integrated multi-channel customer service solutions, including KANA Response OnDemand for high-volume email response management and case management; KANA Response Live OnDemand for live chat, co-browse and Web collaboration; and KANA IQ OnDemand, a knowledgebase solution for agent-assisted and Web self-service.

"While many companies are attracted to the SaaS model for its rapid implementation and lower costs, they still require the robust functionality and scalability of traditional software," said Michael Fields, chief executive officer of KANA. “ KANA’s OnDemand suite is built upon proven technologies that can effectively meet the needs of companies of all sizes, while reducing the cost and resources needed to deliver superior service and support across channels. In the coming months and years, we anticipate that the reputation and performance of our solutions will propel KANA to the forefront of the OnDemand customer service market.”

The KANA OnDemand suite is available immediately. Pricing details are available upon request.

Contact www.kana.com.


Braintech Joins Microsoft’s Robotics Studio Partner Program

Braintech , Inc. has signed an agreement to join Microsoft Robotics Studio Partner Program. The program recently announced by Microsoft is designed to support key companies that plan to develop, integrate and market robotic software, devices and systems utilizing Microsoft Robotics Studio, a new Windows-based environment for academic, hobbyist and commercial developers to easily create robotic applications for a wide variety of computing platforms. As part of its support for MSRS, Braintech plans to release a suite of software services under the brand name, VOLTS-IQ (an acronym for “visual object location and tracking services”). These services which draw upon Braintech’s extensive expertise in the field of vision guided robotics, for the first time allow developers of robotic systems to “vision-enable” their projects and products with unprecedented ease and speed, circumventing the long learning curve involved with vision research and development and resulting in considerably shorter time-to-market for commercial robotic products.

Owen Jones, Braintech’s CEO says, ”For the past decade we’ve researched, developed and deployed state-of-art vision technologies allowing industrial robots to see and react intelligently. Over this time, we have amassed unique and valuable expertise in the field of 3D robotic vision and chose to partner with ABB in the automotive/industrial robotics markets. Now, as part of MSRSPP we want to make available, to device builders targeting the consumer robotics market as well as hobbyists and academics, our vision-based guidance and tracking technologies“

Joseph Fernando, Microsoft’s Architect & Program Manager for Robotics states “Vision is an essential component of virtually every imaginable useful or interesting robotic product. Without the ability to see, robotic products can’t react intelligently to the events, objects or people around them and remain simple motion playback machines capable of only simple behaviors. Braintech has shown the ability to build unique technologies in this area and perhaps more importantly, the ability to turn these technologies into commercial grade products. We feel that Braintech has a unique blend of technological and productization expertise and is well positioned to supply key vision technologies for the emerging consumer robotics market. We are glad that Braintech sees the strategic value in MSRS and has decided to join the partnership program. This program gives us an effective means to support companies like Braintech and help them bring their expertise and technologies to the robotics community at large within the unified MSRS platform.”

Microsoft Robotics Studio environment is an end-to-end, scalable and extensible robotics development platform that supports a wide variety of hardware. The development environment supports a wide range of programming languages, and includes a new visual programming language, which enables non-programmers to create and debug robotics programs very easily. Microsoft Robotics Studio includes a powerful physics-based simulation environment that lets developers simulate robotics applications in realistic 3D physics-based virtual environments. The lightweight services-oriented runtime supports the execution of concurrent and distributed robotic applications.

Contact www.braintech.com/volts-iq


Francisco Partners Makes Offer to Acquire Mincom Limited

Mincom Limited, a global software and services provider to asset intensive industries, and Francisco Partners, a leading global technology-focused private equity firm, have entered into an Implementation Agreement under which Mincom, subject to customary closing conditions, will be acquired by Francisco Partners in an all cash transaction valued at A$315 million. Francisco Partners proposes to acquire all shares and share options in Mincom via a scheme of arrangement that sees Mincom’s shareholders receiving A$8.77 in cash per share and option holders receiving A$8.76 in cash per option.

“This transaction is exciting news for all of our shareholders, many of whom are current or past employees, allowing them to realize the value of their investment at a substantial premium to the most recently traded share price for Mincom. The board unanimously supports this transaction and recommends that shareholders vote in favor of the acquisition,” said Bob Savage, Chairman of Mincom.

“We are long-term investors in global technology companies who have, and are committed to maintaining, leadership in their markets,” said Andrew Gray, Managing Director, of Francisco Partners.

“We have been impressed with Mincom’s products, client base and management team, all of which have contributed to building one of the most formidable Enterprise Asset Management companies in the world. We are excited by this opportunity to partner strategically with the management team and continue building on the success of the business,” Mr. Gray said.

The Board of Mincom has unanimously recommended that shareholders vote in favor of the acquisition in the absence of a superior proposal. The transaction is expected to close within the next 90 days.

Mincom was advised by the Caliburn Partnership and McCullough Robertson. Francisco Partners was advised by UBS and Allens Arthur Robinson.

Contact www.mincom.com.

Contact www.franciscopartners.com.


Scalix and SugarCRM Integrate Messaging and CRM for Linux and Open Source Customers

Scalix Corporation and SugarCRM have partnered to allow mutual customers the chance to integrate their Linux-based messaging from Scalix with their customer relationship management (CRM) system from SugarCRM, using multiple versions of Microsoft Outlook, for a fully integrated, server-to-server CRM and messaging solution.

Scalix Corporation, a provider of Linux-based enterprise messaging software and SugarCRM, a provider of commercial open source CRM, said the integration allows their mutual customers to move seamlessly – within a complete Linux environment – between their primary Outlook desktop email client, SugarCRM software and Scalix’s Linux-based Mail Server, assuring more efficiency and accuracy in managing sales leads by their customers.

The companies are collaborating to bring further integration between Sugar and Web-based messaging, giving enterprise sales teams the richest possible environment for managing their sales leads and customer accounts.

“Our users require seamless integration between their CRM, email and calendaring solution,” said Jacob Taylor, SugarCRM’s CTO and co-founder. “Given the broad adoption of Outlook in the enterprise and the increasing deployment of Linux infrastructure, Scalix’s extensive Outlook support and comprehensive Linux environment directly addresses the needs of our customers. We look forward to working closely with Scalix to provide increased benefit to our shared customers.”

By running the Sugar Plug-in for Microsoft Outlook, Sugar edition and Scalix users will receive advanced, integrated functionality. Available today and in the near future:

  • Full ability to sync shared information between Sugar and Scalix, including contacts, calendar items and tasks
  • Email archiving from the Scalix inbox into Sugar
  • Rules-based sync of designated customer contacts, messages and appointments
  • Integration with Scalix’s award-winning AJAX web client, called Scalix Web Access (SWA), will be available in Scalix’s next release. SWA is so fully featured that many of Scalix’s users around the globe are using it as their primary email client.

Contact www.scalix.com

Contact www.sugarcrm.com


Many Opportunities Still Exist for Established Players in the On-Demand CRM Market, but New Entrants Face Significant Challenges

A new report by Tier1 Research (T1R) finds that the market for on-demand CRM software is booming and creating plenty of room for growth for the established players in this space. On the other hand, new entrants attempting to build a position in the on-demand software-as-a-service ( SaaS) CRM business at this stage of the game face several barriers to entry, including classic startup risks, financial risk and competitive challenges from entrenched players. These findings are contained in a report released today by Minneapolis-based T1R, an independent research firm that analyzes the financial and industry implications of developments affecting public and private companies within the IT, communications and Internet sectors.

"Based on T1R's analysis, the estimated market size for the CRM software segment was $9.5bn in 2006, with 6.3% of the total market represented by SaaS deployments," said Michael Mankowski, senior analyst at T1R and lead author of the report. "Even with the buzz in the market around SaaS, on-premises deployments rule the roost, and the lower-than-expected penetration is great news for established players.

" SaaS has established itself as a viable business model with CRM on-demand, but larger companies cannot rest on their laurels. Larger on-demand CRM providers face a challenge of remaining nimble, and they need to build out additional functionality for continued success as they compete with smaller SaaS providers."

With more than 150 on-demand CRM providers across the globe, T1R analysts found that CRM is a starting point for many on-demand vendors, but some barriers to entry exist. These include:

· The challenge of leveraging the ability to be flexible and deliver unique value through software features and functionality that is not always available when working with the larger CRM providers.

· The challenge of getting to cash-flow positive, since the costs associated with building a multi-tenant environment are significant. It is not uncommon to have a long breakeven point in the early stages of the business, given the cost of goods sold and indirect customer acquisition costs.

This 20-page report, titled ' SaaS Report Series: Perspectives on CRM,' provides analysis on where the on-demand CRM market is going – including the opportunities that exist for established players and the risks and challenges facing startups. It also discusses insights garnered from T1R's proprietary ISV/ SaaS database and examines the state of CRM on-demand and the needs of the small, medium and large customers.

Contact www.tier1research.com

  Upcoming Industry Events - Click here to view full Calendar

2007

January 22-25 – MicroStrategy World. Las Vegas, Nev. Contact www.microstrategy.com

January 28-31 – Citrix Summit, Orlando, Fla. Contact www.citrix.com

January 30-31 – SIIA’s Information Industry Summit, New York, NY. Contact www.siia.net

February 5-9 – RSA Conference, San Francisco, Calif. Contact www.rsaconference.com

March 5-9 – Game Developers Conference, San Francisco, Calif. Contact www.gdconf.com

March 5-8 – EclipseCon 2007, Santa Clara, Calif. Contact www.eclipsecon.com

June 6-7 – SLAM 2007 – Sales, Licensing, Alliances & Marketing for Software Companies, Denver, Colo. Contact www.softwarebusinessonline.com

October 2-3 – Software Business 2007, Santa Clara, Calif. Contact www.softwarebusinessonline.com


March 27-29, 2007
Orange County Convention Center
Orlando, FL
CTIA WIRELESS, the spring convention, is the largest, most comprehensive show in the wireless industry and the premier venue to exchange ideas, create partnerships and collaborate to bring wireless telecommunications to new heights. We have done all the legwork to bring every element of wireless together in one location over the course of three days.

This global event draws attendees from dozens of different industries in more than 80 countries around the world, serving every aspect of wireless - providers, users, developers, buyers and manufacturers. Click here for more information.


June 6-7
SLAM 2007 – Sales, Licensing, Alliances & Marketing for Software Companies,
Denver, Colo. Contact www.softwarebusinessonline.com

SLAM 2007: Sales, Licensing, Alliances & Marketing for Software Companies will be held June 6-7 at the Hyatt Regency Tech Center in Denver , Colorado .

The third annual conference focuses successful business development models, sales methodologies, licensing technologies, partnering, customer relationship management, growth opportunities, and marketing issues facing software companies. Attendees are vice presidents, directors, product managers and personnel at independent software vendors.

SLAM 2007 will offer visionary keynotes from executives at the software companies shaping the industry and in-depth breakout session will offer insight from the top sales consultants who work for software companies. The program is unmatched in delivering the tools and processes to reach quarterly and annual targets. This year's conference will have added emphasis on New Market Opportunities, Partnership Programs, Software as a Service Evolution, and Future Industry Trends.  


October 2-3
Software Business 2007, Santa Clara, Calif.

Software Business 2007 will be held October 2-3 at the Hyatt Regency in Santa Clara , Calif.   The annual conference focuses on current strategic business, financial and technology issues and growth opportunities facing top executives of software companies. It is a two-day conference serving owners, chief executives, presidents, vice presidents and division or department directors of leading and fast-growing software companies located throughout North America who are conducting business domestically and worldwide.

The sixth annual conference returns to Silicon Valley for the first time in four years. It will offer speakers from leading software companies and deliver the industry's most informative sessions through four tracks of sessions. Additionally, the conference will offer full- and half-day workshops on Monday, October 1


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