Cloud Computing – nitin badjatia

♦ CRM’s evolution toward customer engagement

Over the last two years, mergers and acquisitions have driven many of the headlines in the CRM world [footnote] Disclosure: I’m back at Oracle via their acquisition of RightNow Technologies, a CRM/CX cloud vendor. [/footnote]. We’ve watched the broadest consolidation that CRM has seen in nearly a decade. At the same time, Gartner predicts the CRM market, on license revenue alone, will cross $23bn this year [footnote] Gartner [/footnote], and pegs it to hit $37bn by 2017 [footnote] Forbes: Gartner predicts CRM will be a $37bn market by 2017 [/footnote]. Generally speaking, consolidating market segments don’t grow that rapidly. So, what’s going on? While Gartner’s definition of the CRM market may be evolving, a fundamental change has been underway for some time. We started to see this change about five years ago as vendors, like RightNow, began to redefine CRM toward Customer Experience (CX). The movement toward CX largely came about as social technologies were infused into CRM platforms, enabling the last quarter-mile of CRM [footnote] The analogy refers to landline communications. The most expensive part of communications networks tend to be the ‘last quarter-mile’ to a residence. Without that last quarter mile being in place, the network can’t fully function, but making those connections is extremely costly. [/footnote]. This repositioning of CRM toward CX has now become a full-blown stampede, with nearly every major vendor claiming their technology is designed to put the customer’s experience first [footnote] Few actually deliver true CX applications, but nearly all know how to hype it [/footnote].

A half decade of CX momentum is now moving the market toward technologies that drive beyond ‘experiences’ and begin to focus on ‘engagement’. Paul Greenberg, the resident Dean of the CRM community, recently posted some random thoughts on this shift:

The customer engagement market is far larger in potential than CRM and in fact is the replacement market for CRM. CRM as a market is going to be a sub-market – the operational requirements for customer engagement and the companies serving that need – will be a substantial chunk of the customer engagement market, but by no means the only segment of it. Social CRM, which morphed CRM into what it is today, was the forerunner and the signal for this. Social channels are now inclusive in CRM systems and thinking – incorporated with the more traditional operational aspects of CRM systems and thinking. It’s the operational hub with pipes that are driven into the other areas around customer engagement. [footnote] Random thoughts on CRM – Paul Greenberg [/footnote]

Paul goes on to list seventeen areas that are either converging to, or sprouting from, traditional CRM markets. The growth that Gartner predicts, can be seen on this list. The CRM market is morphing from systems that focused on capturing transactional data, to technologies that drive greater context, decisioning, and involvement of customers. These new areas are still disconnected, as Paul notes in his post, but I think the shift toward customer engagement [CEM] is going to happen faster than CRM’s move to CX. This will happen faster, I think, because many of the CEM vendors which enable Paul’s seventeen areas are very small, agile, and don’t carry the legacy ‘baggage’ of traditional CRM. CX was a ‘build-out’ of CRM, whereas the move to CEM is coming from outside the CRM world, in. As CEM pulls the industry to closer toward a customer engagement approach, the next eighteen months or so will be an interesting time for the legacy CRM industry.

On spreadsheets, big data, and GoodData’s Bashes

During a recent conversation I had with Mark Angel [founder of Knova Software and most recently the CTO at Kana], he was quick to point out that the ‘spreadsheet’ stage of cloud computing had yet to arrive. His point was that most of the computational horsepower of the cloud was still largely relegated to the technical elite inside organizations, and end-users had limited options on how cloud data were interpreted. Data, therefore, are frequently interpreted out of context, and far removed from the impacted business process. Nearly a generation ago, spreadsheets altered the corporate landscape by empowering end-users to manipulate data based on their expertise, unleashing an entirely new way of extracting meaningful insights from data. To Mark’s point, for many enterprises, that stage of cloud computing has yet to arrive.

The best opportunity for this ‘spreadsheet’ stage to take hold is in the white-hot field of big data. While capturing and storing data has never been cheaper, the opportunity to extend the ability to interpret this data to vast armies of knowledge workers has been limited. It was in that context that I found this morning’s announcement by GoodData of their Bashes to be an interesting development:

We call our apps “Bashes” — for business mash-ups — because they combine the best elements of consumer apps with modern, enterprise-class technologies. That means consumer apps’ clean and intuitive user interface, ease of use and device independence, with cloud-based business technologies that collect and manage structured and unstructured data from hundreds of sources. With Bashes, businesses can discern meaning from all the data flooding in from emails, social media, enterprise software and cloud apps.

– Filling in Big Data’s Missing Link: Making Big Data Pay for Itself @romanstanek

Clearly there’s an opportunity to give today’s knowledge worker a spreadsheet-like environment to mash-up disparate data sets on the fly. It looks like GoodData’s positioning their platform, and Bashes, to be one of the spreadsheets for this generation’s knowledge worker.

ReadWriteWeb discusses the state of software innovation in India

: Image via CrunchBase

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.

Amazon continues its cloud computing build out

Image via Wikipedia

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.

Thoughts from Dreamforce (Salesforce Developer Conference 2008)

Image by Mountjoy via Flickr

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.

Tim O’Reilly discusses web 2.0 and cloud computing

Image via Wikipedia

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.

Web 2.0 and Cloud Computing

Related articles by Zemanta

Related articles by Zemanta

Related articles by Zemanta

Related articles by Zemanta