A Software Insider's Point of View

Who Says Support Has To Be Bundled With Maintenance?
About a decade back, vendors would offer support and maintenance as two separate line items on their contracts.  Support would run about 5 to 10% the license fee and so would maintenance.  Keep in mind, average support and maintenance fees were under 15% back then.  Here’s a [...]

Single Instance ERP Harder And Harder To Justify
The holy grail of an ERP implementation used to be the single instance deployment.  However, market forces, a move to adopt new disruptive technologies, slow pace of innovation from incumbent vendors, and high maintenance fees have changed many organization’s perspectives.  Add a slew of rapidly changing business requirements [...]

Apps Users Seek Third Party Maintenance For Cost, Value, and Service
Updated surveys from inquiries, client conversations, and user group meetings show a 113.8% increase in interest in third party maintenance (3PM) services from Q3 2009 to Q1 2010 (see Figure 1).  Key factors stem from (see Figure 2.):

Continuing cost pressures. Budgets continue to be at [...]

Chatter Represents SFDC’s Unified Move Into Social

Announced at the 2009 Dreamforce conference, Chatter represents both a collaboration application and platform.  Software built on the Force.com platform will gain the collaboration capabilities.   Solutions in AppExchange will be able to use profiles, real time streams, and other API’s.   With a 100 customers testing out user experience, [...]

New Changes Hint At Hasso’s Priorities
In a not surprising update, SAP makes changes to Executive Board and management.  Here are the changes:

Gerhard Oswald becomes COO. Gerhard has experiences in support, consulting, education, custom development, and quality.Gerhard’s contract has been extended till December 31, 2011.
Point of View (POV):  Gerhard’s been a long-timer at SAP with 30 [...]

Gains In SaaS Adoption Driven By Speed And Cost Savings…
Preliminary data from Q4 earnings data show continued traction among SaaS solutions.  Expect SaaS deployments to gain steam in 2010 as organizations finalize their SaaS apps strategies to take advantage of 7 key benefits:

Richer user experience - SaaS apps bring Web 2.0 usability to the enterprise [...]

Standard Support Returns After Much Deliberation

SAP announced today that they would be reintroducing their Standard Support offering. Customers now gain choice with a 2-tier maintenance offering. Here are the details between standard support and enterprise support.

* Standard Support Offering reintroduces at 18%. Customers seeking core bug fixes, support packages, risk mitigation, and related new functionality will have choice in staying on standard support. The program is designed for customers who seek to keep their systems up and running. Customers with CPI clauses in their contracts will want to take note - the first set of consumer price index (CPI) price increases will begin January 1st, 2012.
* Enterprise Support remains at 22%. SAP will continue to offer Enterprise Support at 22% for new customers and a ramp up for existing customers (see Figure 1). Enterprise support includes features such as best practices for IT operations, proactive monitoring and reporting, and transparency for business process performance. Customers who choose to go with Enterprise Support prior to March 15th, 2010 will be eligible for ramp up.
* Supplemental offerings still available. Other programs such as Max Attention, Safeguarding, and Product Support for Large Enterprises (PSLE) will continue to be available by choice and invitation.

High Cost Of Ownership And Changing Requirements Drive SAP Users To Seek Optimization Solutions

As users await SAP to regain its mojo (see Dennis Howlett’s post) and implement it’s “Voice of the Customer” strategy in 2010, users must continue to reduce their cost of ownership and complexity. In addition, rapidly changing business requirements require some users to seek SaaS alternatives, additional point solutions, and extensions.
Consequently, vendors providing SAP optimization and extension solutions represent one of the fastest growing parts of the $78.7B (2009 Altimeter Group estimate), 850,000 SAP service partner and developer ecosystem. SAP users already embrace many of the solutions from vendors on this inaugural SAP Optimization List as part of their business value oriented apps strategy. The living list covers seven areas including:

1. application extension and usability;
2. application life cycle management;
3. archiving, storage, and test data management;
4. license management and optimization;
5. Microsoft Office integration;
6. third party maintenance; and
7. virtualization

Keep In Mind Basic Rules Still Apply Regardless Of Deployment Option

The proliferation of SaaS solutions provides organizations with a myriad of sorely needed point and disruptive solutions.  Good news - business users can rapidly procure and deploy, while innovating with minimal budget and IT team constraints.  Bad news - users must depend more on their [...]

Begin Apps Strategy Projects With Bite-Sized Entry Points
Complexity often plagues today’s apps strategies.  With tight budgets, limited resources, and little time, organizations need to find bite-sized entry points. The need to meet ever changing complex business requirements requires a four-step, basic (A,B,C,D) approach:

Align your business requirements with the hierarchy of business needs. Every project [...]

DSAG project team and project leader departure could signal disagreement with methodology not SUGEN
SAP embarked on an ambitious program to prove value in its Enterprise Support fee hike last year.   As planned, SAP should announce the results for the first set of SUGEN KPI’s in early December.  However, two key SUGEN KPI project sponsors [...]

Building Innovation With And Around Your SAP Environment
Location: Manchester CentralAuditorium
Date:23/11/2009
Start Time: 16:25
End Time: 17:00
Speaker: R “Ray” Wang
Company: Partner with Altimeter Group
Keynote summary:

Pace of change continues to increase in market forces, work dynamics, business models, and pace of technology adoption.
Innovation is essential in this market.
There’s a tonne of innovation at SAP. Management and politics keep it [...]

SAP users in UK and Ireland remain equally skeptical about SAP

(Photos by R Wang & Insider Associates, LLC.   Copyright © 2009 All rights reserved.)
The SAP user group hosted its annual event.  Conversations with 37 clients reflect the following broad trends in the UK and Ireland:

SAP users remain skeptical about benefits promised by SAP [...]

Purchasing in Q3 reflected both economic downturn and summer doldrums.  While on-premise vendors continued massive double digit declines in year-over-year new license revenue, SaaS vendors faced some pressures in keeping up with tremendous growth.  However, long term economic outlook still favor SaaS players and early indications on Q4 budget flush indicate that SaaS and Cloud [...]

Rapid SaaS Adoption Will Lead To A Repeat Of 1990’s Best Of Breed Integration Challenges

The proliferation and rapid adoption of SaaS solutions stems from 7 key benefits: richer user experience, rapid implementation, frequent cycles of innovation, minimal upgrade hassles, always on deployment, subscription pricing, and scalability (see Figure 1). Despite these benefits, organizations head full [...]

Oracle’s Fusion Apps Addresses A Broad Set Of Horizontal Modules

Oracle’s co-founder and Chief Executive Officer, Larry Ellison announced the code completion of Fusion Apps in today’s late afternoon keynote.  Though Ellison did not give precise guidance on general availability (GA), he did hint that the product would be available, “sometime in 2010″.  The product currently [...]

Connect.  Collaborate.  Innovate.
Welcome to the first of many Altimeter Group research reports.  Before you dive deep into the Customer Bill of Rights: Software-as-a-Service report, we wanted to share with you a bit about the research process and how we work within the community.

Connect.  We strive to bring new people together and share our knowledge.  Knowledge [...]

This post has been cross posted on the Enterprise Advocates blog
A New Way Of Creating Research - Collaborative Input And Review
Some time early next week, we (i.e. Altimeter Group’s Jeremiah Owyang and I) will be publishing a Customer Bill of Rights - Software-as-a-Service.  Through the generous input of 57 collaborators and organizations, this document [...]

Free Software Gimmicks From Some On-Premise Vendors Only Address The License Cost Issue

Recently, readers and clients have been approached by on-premise vendors offering free software modules to incentivize new license purchases.  However, free should not be confused with the Open Source (i.e. Freeware) movement, where source code is provided with minimal copyright restrictions.  Free should [...]

Title: Industry Event: Sapience 2009
Location: Hyatt Regency Cambridge, Cambridge, MA
Link out: Click here
Start Date: 2009-12-08
End Date: 2009-12-09
Description: In 2008, SAP announced a 30% maintenance increase. For the first time in history over, 100 SAP customers spoke out publicly, organizing a press conference to express their deep frustration not only about the increase but also about [...]

Vendor Sales Reps Keep Using An Age Old Excuse Out Of Habit
Many organizations start their Q4 software maintenance renewals process in September.  This has led to a flurry of emails and phone calls about revenue recognition (a.k.a. “rev-rec”) rules for software maintenance contracts.   Apparently, both customers and vendor sales reps suffer from mass confusion [...]

Most on-premise vendor continue to slip into significant YoY losses in license revenue and overall revenues.  Meanwhile, economic conditions continue to favor SaaS, best-of-breeds, and purpose built solutions. Major themes in the 2009 Calendar Year Q2 include:

Economic conditions drive demand for best of breed and point solutions delivered by SaaS deployment.  Consequently, SaaS vendors posted [...]

This post was collaboratively written on a wiki with my colleague Jeremiah Owyang whose focus is on customer strategy which encompasses social technologies. Together, we’re covering convergence of the emerging and incumbent technology system.  This entry is also cross-posted on his blog.

Jive Offers Brand Monitoring Using Radian 6 -Empowering Companies To Quickly Respond
Jive Software made [...]

Potential Announcement of * Siemens cancellation represents a shift in mood by one of SAP’s most loyal customers
What’s been rumored for the past few months has now publicly been confirmed discussed.  Golem.de (Babelfish Translation in English) *Wiwo.de,(Wirtschaftswoche the German equivalent of BusinessWeek) (Babelfish Translation in English) reports that Siemens says SAP Tschüß (i.e. ciao, cheers, [...]

This post was co-written with Jeremiah Owyang, Partner and Colleague at Altimeter Group

Above: Pictures from Salesforce’s event
Salesforce.com launches a new set of social apps that make CRM connected to the social web. So what does it mean?
Salesforce.com’s Twitter integration and application launch helps brands monitor what’s being said. Yet despite the fanfare, the application lacks [...]