Mike Speiser, Managing Director at Sutter Hill Ventures, has an interesting post on GigaOm today.  An excerpt:

Self-Service Nation: Why Targeting Small Business Is Good Business

While the 80-20 rule can be very powerful, the reality is that many of the costs associated with building, supporting, distributing and selling technology products have dropped dramatically in the past decade. Yet many enterprise technology executives are operating as though the cost of distribution hasn’t changed since the early 1990s. In the coming years, I expect startups to increasingly target the massively underserved small- and medium-sized business (SMB) segment by taking advantage of the arbitrage between actual and assumed costs of sales. Self-service sales models will be a key element of these startups that will forever change the face of the enterprise technology business.

As he further explains in his post, there is a significant nascent market at the small business level that has, up until now, been left for Microsoft to dominate. Smart SaaS players, as well as others that do not have legacy enterprise software DNA, are best positioned to successfully target this market in coming years. I think companies like 37Signals are already flourishing here, and serve as a great source of ideas and experience for anyone looking to tap into a greatly underserved market.

ReadWriteWeb recently ran a post about the state of India‘s innovation engine.  I’ve posted a clip here, but click through to read the whole thing:

State of Innovation in India: 2009 – ReadWriteWeb

That Big Wide-Open SaaS Opportunity

Indian start-ups that dreamed of creating the next SAP or Oracle faced massive hurdles on the sales and marketing front. Sure, they could invest five times more in R&D with the same budget. But the reality was that R&D was a tiny portion of the budget. The big money went into sales and marketing. The R&D budget arbitrage was not enough to move the needle.

This is totally and utterly different today. We have written about the SaaS opportunity many times. This opportunity is totally location-agnostic. But it is also totally price- and cost- sensitive, and R&D is the biggest cost. Success stories such as 37 signals, Automattic, and Zoho did not win by hiring an enterprise sales force or buying advertising. They “let the software do the talking.”

This is not just an opportunity for a few big winners. This is an opportunity for thousands of small companies to go after niche markets. The interesting thing about niche markets today is that they are inherently global and can be a lot bigger than people think. These small niche start-ups won’t make headlines and probably won’t get VC financing. But they won’t need VC financing. What is fascinating about SaaS globally is how few start-ups have been VC financed. Most have gotten to profitability on tiny seed rounds or even with revenue financing from clients.

As this portion of the post highlights, there are two important pieces of the puzzle that will enable Indian developers to thrive, a focus on building excellent software (DimDim being a good example) and the rise of SaaS and cloud computing delivery models.  Excellent software, along with a strong social media strategy, enables a natural sales process, and cloud computing allows development and delivery of software on a global scale.  Rather than focusing in on the struggling IT conglomerates, India’s near term innovation future may well rely on a group of agile cloud-based companies.

I’m a big fan of mind mapping.  For years I used MindJet’s MindManager application, but I’ve since migrated to the cloud based MindMeister.  MindMeister is not as robust as MindManager, but it allows for collaborative brainstorming without client-side software.  Over the last year or so, MindMeister has grown in capabilities, including offline mind mapping (through Google Gears), but lacked one critical element of useful mind mapping, cross connections.  The latest release now incorporates that critical function, in addition to other features:

MindMeister News – Mind Mapping on Steroids

Graphical cross-connections

You can now add graphical cross-connection between your ideas in your mind maps, which will be displayed as green arrows. This feature is still beta, so please be kind. We’ll add more functionality here in future, such as control points and formatting.

MindManager is still more robust than MindMeister, but the later is quickly catching up. Mindjet has also begun to offer an online solution, but I haven’t had the time to review it. Quite frankly, MindMeister does the job for me.

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I hate PowerPoint.  Actually, I don’t hate PowerPoint, I hate how PowerPoint makes it easy for poor communicators to believe they can be the next Steve Jobs.  I’ve sat through excruciating 162-slide presentations done by ‘management’, in 10 point type.  I’ve nearly been blinded by awful color choices.  I’m sure you have too.  I think one of the primary reasons this happens is that most PowerPoint presentations are developed in a vacuum.  The lone PowerPoint ‘artiste’ slaves away, late at night, slapping together random thoughts and cheesy graphics into a massive deck that often misses the point.  SlideShare, the online slide deck sharing site (sort of a YouTube for slideware), has just released a PowerPoint plug-in, that may bring the lonely deck-developer into the social realm.  With the add-on, deck-developers will be able to share their works of art directly from the very non-social PowerPoint, and more importantly, be able to search for inspiration directly from within PowerPoint.  Appropriately, SlideShare has a slide deck to explain the advantages:

Now, sharing alone won’t solve the awful PowerPoint crisis, but hopefully if we get these people into group therapy, we can save at least one meeting from a cruel and unusual presentation.

SlideShare Presents Your Newest Social App: PowerPoint – ReadWriteWeb

Using the SlideShare Ribbon, users gain the ability to share presentations from within PowerPoint, update existing presentations with new content, search existing SlideShare presentations for examples, download SlideShare content for remixing, and view presentations from contacts and groups. User can also check their SlideShare statistics from within PowerPoint.

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With the release of CloudFront, Amazon continues to build out a full selection of cloud computing offerings.  With CloudFront even small developers can gain the power of a global content distribution network (much like Akamai).  Werner Vogels, Amazon CTO, explains the service in this post:

Expanding the Cloud: Amazon CloudFront – All Things Distributed

Today marks the launch of Amazon CloudFront, the new Amazon Web Service for content delivery. It integrates seamlessly with Amazon S3 to provide low-latency distribution of content with high data transfer speeds through a world-wide network of edge locations. It requires no upfront commitments and is a pay-as-you-go service in the same style as the other Amazon Web Services.

Amazon CloudFront has been designed to be fast; the service will cache copies of the content in edge locations close to the end-user’s location, significantly lowering the access latency to the content. High sustainable data transfer rates can be achieved with the service especially when distributing larger objects.

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Last week I was at the Salesforce developer conference, Dreamforce 2008.  Most of the significant news (linked below) to emerge from the Moscone Center was tied to the theme of ‘Cloud Computing‘.  This included announcements related to the availability of Facebook integration, the ability for customers to host their websites on the Salesforce ‘Cloud’ (a service known as Sites), and the continued expansion of the force.com platform into areas far and wide (verticalization).  Companies usually wait for major conferences to make major announcements, and most of the new news created the appropriate level of buzz in the hall, and on the web.  Clearly Salesforce sees their existing SaaS model extending beyond hosted enterprise software, and deeper into other parts of the infrastructure business as well.  In general, Dreamforce was full of optimism at a time, and in a market, that is in need of such excitement.  Some even ventured to call it the ‘Cloud Computing Woodstock‘, perhaps inspired by the presence of Neil Young.  On a more serious note, beyond the major introductions made, there were other important vibes to groove to.  Here are some thoughts.

Salesforce Adds Robust Knowledge Management to Customer Service and Support

This was also, I believe, the first major event for Salesforce after their acquisition of Instranet, the European based knowledge management application company.  Throughout the three day conference, Salesforce Knowledge Management (SKM) – as Instranet has now been relabeled – played an important role in many of the presentations that I attended, and reflects the growing importance of the customer service and support (CS&S) space for Salesforce.  In the last year or so, I’ve noticed an increased presence of Salesforce in the CS&S space.  With SKM Salesforce closes a major hole in their CS&S product offering.  Based on the the demonstrations that I saw of the SKM product, they are now poised to make a major play for CS&S mindshare in the U.S.  Instranet has been a big player on the European scene, with a significant share of the incumbent Telcos and other high volume, low complexity call centers in the Old World.

SKM approaches CS&S knowledge management differently than the traditional KM vendors in CS&S.  It is a much lighter application to deploy than the established players in CS&S knowledge management.  By light, I mean that SKM does not need a lot of administrative tweeking or constant management of ontological or taxonomic layers.  The added flexibility allows for customers to ‘hard code’ processes around SKM, which is critical in many high volume call centers.  By baking in processes, these large call centers effectively reduce training time.  For Salesforce, adding a ‘light’ application to their solution stack makes a whole lot of sense as it plays to the core sales proposition of their entire suite of applications, which is to provide rapid deployment that, in return, begins to pay benefits (ROI) immediately.  Light doesn’t necessarily mean lightweight, as I have heard that SKM is working its way through the Consortium for Service Innovation’s Knowledge Centered Support (KCS) verification process.  When verified, Salesforce will be one of the few KCS verified companies that will have an integrated incident management, knowledge management solution.

Multi-Tenant Integration may lead to  real rewards for Customer Service and Support (and product management)

Recently, Salesforce has enabled seamless Salesforce to Salesforce (StoS) integration which allows two Salesforce hosted instances to be integrated by application administrators, and doesn’t require complex coding.  This multi-tenant integration was demonstrated on the second day in the lead-up to Michael Dell‘s Keynote.  The demo focused on how, through multi-tenant integration, Dell was effectively building an opportunity supply chain through which downstream distributors, and Dell, could coordinate sales activities.  In this instance, the integration allowed for a tighter relationship than traditional partner management systems did.  The demo got me thinking about how this type of integration could be used to enhance customer service and support.

A major challenge that I’ve seen many call centers, and help desks, deal with is managing customer exceptions on products developed by other companies (think wireless telcos reselling handsets, for example).  Many manufacturers today incorporate OEM solutions into their final product.  When these products encounter exceptions, the manufacturer often has to deal with both their own product issues and those of the OEM embedded product.  I’ve visit some call centers where that OEM exception rate can be upwards of 80%!  Basically this means that those call centers are spending more time handling someone eleses exceptions than their own.  This has two major implications.  First, the overhead of dealing with downstream exceptions skews the cost of running the call center.  Second, the downstream OEM manufacturer, usually, never receives a detailed understanding of how – and how many – exceptions are caused by their product.  In one instance that I observed several years ago, the OEM product was not only causing a high level of exceptions, but the final product manufacturer was overlooking a performance guarantee from the OEM because the exception handling wasn’t fully understood.  In an integrated CS&S ‘supply chain’, two critical elements could be easily addressed.

Some of this is totally speculation on my part, but I’m assuming that Salesforce will eventually expose CS&S to CS&S integration.  If so, two way CS&S relationships could be enabled to enhance both the support agent experience and the overall product experience.  First, integrated analytics could be exposed to OEM support agents which would allow them to be more proactive in dealing with upstream support issues.  Second, OEM product management would have a greater insight into product exceptions, and this insight would be faster delivered than traditional modes.  Third, knowledge sharing relationships could be created whereby the combined knowledge-base, through the SKM product, would reflect a broader understanding of both the final product and the OEM product.

Of course, this is all predicated on all the companies involved using Salesforce as their CS&S solution.  For Dell, their sheer size must play a key role in their ability to influence their partners’ choice of SFA applications.

Final Thoughts

I attended Dreamforce on behalf of a non-profit, Silk Screen, that I’m actively involved with.  At Silk Screen we have been very grateful for Salesforce’s Foundation donation of seat licenses.  It makes our management of resources more efficient, and most importantly, lets us apply our funding to the central cause of the organization.  What pleasantly surprised me at Dreamforce was how central the Foundation’s activities are in the corporate culture.  I learned quite a lot from the sessions I attended on the non-profit front as well.

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Over the last few months I’ve been asked, a lot, by some smart folks on how web 2.0 and cloud computing are defined, and what their impact will be on technology as a whole.  Since both terms are used very loosely, and often times by marketers who aren’t knowledgeable in either field, web 2.0 and cloud computing have somehow melded into one concept for many people.  This, however, is not the right way to look at things.  In a recent email to a friend I put forth my thoughts on the matter, and was busy recrafting a post from that email until I read Tim O’Reilly’s post this evening.  As expected, his definitions are much better than mine.  He also goes on to develop a case for the future impact of both concepts for the technology industry:

Web 2.0 and Cloud Computing – O’Reilly Radar

I believe strongly that open source and open internet standards are doing the same [migrating the point of profit] to traditional software. And value is migrating to a new kind of layer, which we now call Web 2.0, which consists of applications driven not just by software but by network-effects databases driven by explicit or implicit user contribution.
So when Larry Ellison says that cloud computing and open source won’t produce many hugely profitable companies, he’s right, but only if you look at the pure software layer. This is a lot like saying that the PC wouldn’t produce many hugely profitable companies, and looking only at hardware vendors! First Microsoft, and now Google give the lie to Ellison’s analysis. The big winners are those who best grasp the rules of the new platform.So here’s the real trick: cloud computing is real. Everything is moving into the cloud, in whole or in part. The utility layer of cloud computing will be just that, a utility, without outsized profits.

But the cloud platform, like the software platform before it, has new rules for competitive advantage. And chief among those advantages are those that we’ve identified as “Web 2.0″, the design of systems that harness network effects to get better the more people use them.

Read the whole post, it’s worthwhile.

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A very robust discussion about could computing is going on over at the O’Reilly Radar, associated with this post:

Open Source and Cloud Computing – O’Reilly Radar

I’ve been worried for some years that the open source movement might fall prey to the problem that Kim Stanley Robinson so incisively captured in Green Mars: “History is a wave that moves through time slightly faster than we do.” Innovators are left behind, as the world they’ve changed picks up on their ideas, runs with them, and takes them in unexpected directions.

Image by stan via Flickr

Dion Hinchliffe, over at ZDNet, has a great description of cloud computing, why it’s gathering steam, and how it may impact enterprise applications in the years to come.

Enterprise cloud computing gathers steam | Enterprise Web 2.0 | ZDNet.com

The days when organizations carefully cultivated vast data centers consisting of an endless sea of hardware and software are not over, at least not yet. However, the groundwork for their eventual transformation and downsizing is rapidly being laid in the form of something increasingly known as “cloud computing.” This network-based model for computing promises to move many traditional IT capability out to 3rd party services on the network.

It’s a lengthy post that I would recommend everyone to read.

Image via CrunchBase

Ars Technica is reporting that Steve Jobs sent out an internal email that acknowledged missteps in the rollout of MobleMe:

Steve Jobs: MobileMe “not up to Apple’s standards”

“The MobileMe launch clearly demonstrates that we have more to learn about Internet services,” Jobs says. “And learn we will. The vision of MobileMe is both exciting and ambitious, and we will press on to make it a service we are all proud of by the end of this year.”

Apple may get a mulligan this time from the faithful, but the cloud computing space is rapidly becoming the most competitive place on the internet, and such failures won’t be tolerated for long.

My own experience with MobleMe has left me disappointed, and I’ve decided to stay with the google calendar and gmail solution, and added SugarSync to manage my files across computers.