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Posts Tagged ‘SaaS Bill of Rights’

Research Summary: Constellation Cosmos – Cloud Bill of Rights for SaaS Apps, Actian and Netsuite Achieve Epic Status

Published on April 17, 2013 by R "Ray" Wang

Constellation Certifies Vendors On How Well They Perform To The Cloud Bill Of Rights

The Enterprise Cloud Buyer’s Bill of Rights provides a tool for clients and vendors to change the tenor of contract negotiations from user subservience to an equal and collaborative long-term partnership. This Constellation CosmosCertification for the Cloud Buyer’s Bill of Rights: SaaS Applications is intended to help buyers and prospective buyers of enterprise cloud applications identify the vendors that meet the spirit of the Cloud. The certification applies four of the six Cosmos categories and includes ownership experience, use case support, corporate vision and ecosystem feedback. Constellation rates vendors on a 0- to 5-point scale. Constellation’s goal is to recognize vendors for honoring these rights upfront in their existing contract language and throughout the buyer and ownership experience.

Behind The Scenes On How The Cosmos Works

Constellation CosmosTM is Constellation’s flagship quantitative and qualitative product and solution comparison tool. A typical Cosmos contains 50 to 150 exception-based criteria used to help buy-side clients with product and solution selection across the galaxy of choices. The evaluation comprises of six major categories on a 0 to 5 point scale where Constellation evaluates key criteria in:

Ownership experience. Criteria evaluated include assessments on vendor executive advocacy and accountability, timely and meaningful interactions, professional customer support, overall sales cycle and buying process, quality of product and service, and ongoing transparency.
Solution offering. Criteria evaluated include assessments of functional requirements, technical requirements, architectural considerations, and deployment options pertinent to the category.
Use case support. Criteria evaluated include assessments on the ability to support anywhere from 3 to 12 popular use cases requested by end user clients. Use cases typically align with a business process. Considerations include geographical requirements, market size requirements, and industry requirements.
Market execution. Criteria evaluated include assessments of the total number of live customers, total number of customers including prospects, total number of customers over 1B in revenue, funding raised to date (if a startup), total annual revenues, total number of external trained professional service staff, total number of internal trained professional service staff, number of updates per year, and geographic penetration
Corporate vision. Criteria evaluated include assessments of the strength of management team, product direction, level of innovation, market leadership, community stewardship, and investment in R&D.
Ecosystem feedback. Criteria evaluated include assessments of vendor-supplied references (at least 3), direct customer feedback from inquiries and interactions, and partner feedback.

The final ratings place solutions into 5 categories

Epic. Composite scores typically above 4.25
Stellar. Composite scores typically between 3.25 and 4.24
Emerging. Composite scores typically between 2.25 and 3.24
Nascent. Composite scores typically between 1.25 and 2.24
Laggard. Composite scores typically between 0 and 1.24

The Constellation Cosmos^TMgraphic is a three-dimensional visualization tool built from three axes:

Capability represents the X-axis. Capability includes the use case support and solution offering categories.
Strategy and execution drives the Y-axis. The score comprises of market execution and corporate vision.
Reputation forms the Z-axis. The scores come from the ownership experience and ecosystem feedback categories.
Weighted score defines the radius of the sphere. The scores are the composite from capability, strategy, and reputation.

Constellation updates Cosmos’ periodically as client demand dictates. Some reports may be deprecated over time based on lack of market interest. Constellation reserves the right to determine when reports are updated and in what manner.

NetSuite and Actian Corp Achieve Epic Status In the First Of Many Certifications Of Cloud Companies
For the Cloud Bill of Rights: SaaS Applications, the application and the vendor contract were evaluated on 61 criteria. Constellation evaluated the vendors based on the experience of over 1500 software contract negotiations.

Netsuite provides an end-to-end cloud business application suite and was certified against the 61 criteria listed in Constellation’s Cloud Bill of Rights and the Constellation Cosmos methodology. Netsuite achieved a 4.48 weighted score and achieved the highest certification – Epic for its achievement in meeting the 61 requirements of the Cloud Buyer’s Bill of Rights category

Actian Corporation was certified against the 61 criteria listed in Constellation’s Cloud Buyer’s Bill of Rights and the Constellation Cosmos methodology. Actian Corporation’s acquired Pervasive Software on April 11, 2013. Constellation evaluated Pervasive Software prior to the merger. The cloud based integration application known as Actian DataCloud and its contract were evaluated on 61 criteria in the Cloud Buyer’s Bill of Rights: SaaS Applications.. Actian DataCloud achieved a 4.77 weighted score and achieved the highest certification – Epic for its achievement in meeting the 61 requirements of the Cloud Buyer’s Bill of Rights category.

Report Links

Download a snapshot of the reports at the Constellation Research website:

Constellation Cosmos – Cloud Bill of Rights: Saas Apps Actian Corp.

Constellation Cosmos – Cloud Buyer’s Bill of Rights: SaaS Apps – Netsuite, Inc.

Your POV.

How’s contract negotiations with your Cloud Vendors? Let us know your experiences. Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

Research Report: Constellation’s Research Outlook For 2011

Published on January 4, 2011 by R "Ray" Wang

Organizations Seek Measurable Results In Disruptive Tech, Next Gen Business, And Legacy Optimization Projects For 2011

Credits: Hugh MacLeod

Enterprise leaders seek pragmatic, creative, and disruptive solutions that achieve both profitability and market differentiation. Cutting through the hype and buzz of the latest consumer tech innovations and disruptive technologies, Constellation Research expects business value to reemerge as the common operating principle that resonates among leading marketing, technology, operations, human resource, and finance executives. As a result, Constellation expects organizations to face three main challenges: (see Figure 1.):

Navigating disruptive technologies. Innovative leaders must quickly assess which disruptive technologies show promise for their organizations. The link back to business strategy will drive what to adopt, when to adopt, why to adopt, and how to adopt. Expect leading organizations to reinvest in research budgets and internal processes that inform, disseminate, and prepare their organizations for an increasing pace in technology adoption.
Designing next generation business models. Disruptive technologies on their own will not provide the market leading advantages required for success. Leaders must identify where these technologies can create differentiation through new business models, grow new profit pools via new experiences, and deliver market efficiencies that save money and time. Organizations will also have to learn how to fail fast, and move on to the next set of emerging ideas.
Funding innovation through legacy optimization. Leaders can expect budgets to remain from flat to incremental growth in 2011. As a result, much of the disruptive technology and next generation business models must be funded through optimizing existing investments. Leaders not only must reduce the cost of existing investments, but also, leverage existing infrastructure to achieve the greatest amount of business value.

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Quarterly Financial Tracker: Q4 CY 2009 SaaS Vendors Continue To Trump On Premises Vendors In YoY Growth

Published on February 24, 2010 by R "Ray" Wang

The Year Of SaaS Shows… And Yes, In This Economy.

The recession continued to take its toll on software sales with a slight impact to the SaaS vendors. Growth rates have come down from the high 30′s to the low 20′s. But with “flat” the new growth metric in this down economy, SaaS vendor results remain impressive. On the other hand, traditional on-premises vendors see some light at the end of the tunnel. License revenues have started to stabilize on a year-over-year basis. Major events in the 2009 Calendar Year (CY) Q4 include:

In YoY quarterly revenue growth, Taleo (23.29%) led the pack followed by SalesForce (22.26%), and Blackboard (17.66%) (see Figure 1).
Salesforce.com achieves $1.4B in revenues for CY 2009. As the biggest SaaS vendor in the market, Salesforce.com is bigger than Microsoft Dynamics, Lawson, and Unit 4 (Agresso). To put this in perspective, Salesforce.com’s revenue alone is at the size of all the other public SaaS vendors listed in the Software Insider Index.
Most on-premises vendors stabilized declines in new license revenue (see Figure 2). Keep in mind that on-premises vendors have remained profitable in this downturn. Maintenance continues to provide a cash cushion for most on-premises vendors.
License revenues versus maintenance revenues for some vendors such as Deltek, Epicor, Exact, JDA Software, Lawson Software, Manhattan Associates, and Oracle reach or exceed 1:2 ratios. The result – lagging growth in acquiring new customers on latest releases.
IFS leads with a (21.38%) gain on YoY license revenue with Manhattan (3.21%), Epicor (2.32%), and Oracle (1.92%) following with positive license revenue for calendar year Q4

Figure 1. Most SaaS Vendors Continue Break Neck Growth

Figure 2. Many On Premises Vendors Rely On Maintenance To Bolster Sagging License Revenues

The Bottom Line – Clients Now Expect On-Premises Vendors To Have A “SaaS” Option

As we tally up the winners and losers for 2009, SaaS vendors have shown to the industry what’s required for success in today’s tough economic condition. The secret to their success transcends subscription pricing, cloud services, rapid levels of innovation, and point solutions. In fact, the success in SaaS comes from the attention to the relationship and the willingness to take a customer friendly stance. On-premises vendors who have delivered on a partnership with their customers have known this for years. However, they risk being consumed by the new business models of SaaS and Cloud. Customers expect their vendors to deliver hybrid options; and private and public clouds. Expect on-premises vendors without a Cloud deployment option to fade away in this decade as they become the legacy vendors they replaced in the client/server and Internet eras.

Your POV.

As an end user, have you seen the pace of SaaS adoption increase in your organization? Do you continue SaaS solutions with the same level of comfort as on-premises. As a software vendor, do you feel you have the right go-to-market cloud strategy for 2010? Please let us know if you need help with your enterprise apps strategy by:

Develop your SaaS apps strategy
Assist with SaaS contract strategies and the Customer Bill of Rights: SaaS
Improving innovation via SaaS and other deployment options

You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

* Not responsible for any math errors or erroneous revenue information. Calendar year estimates based on the quarter nearest the calendar year. Exchange rates as of February 24th, 2010. Not responsible for currency flux. Please read the quarterly filings yourself =)

Related resources and links

Take the new and improved survey on 3rd party maintenance

2009 Calendar Year Q3

2009 Calendar Year Q2

2009 Calendar Year Q1

2008 Calendar Year Q4

2008 Calendar Year Q3

2008 Calendar Year Q2

2008 Calendar Year Q1

News Analysis: Salesforce.com Announces Private Beta Of Chatter

Published on February 17, 2010 by R "Ray" Wang

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, scalability, and security, Salesforce.com, moves from vaporware to beta. Some key features include:

Aggregating streams of information. Employees can subscribe to feeds such as internal updates, social networks, and documents.
Automating status updates. Users can receive updates from system and user generated alerts. Alerts can include documents and related links.
Enabling secure document sharing. Chatter feeds can be searched to find relevant information. Document sharing is protected by a secure sharing model from the Force.com platform.

The Bottom Line For Customers – Chatter Represents A First Step Towards Social CRM

Customers seek solutions that bridge the gap between Enterprise 2.0 collaboration with enterprise applications. Investment in solutions like Chatter fit well with Salesforce.com’s existing list of innovative customers. Many require more in-depth social capabilities. Should Chatter be delivered in 2010, customers will win by being able to minimize the number of SaaS platforms, reduce the related costs of vendor management, and take a first step into Social CRM.

The Bottom Line For Vendors – Chatter Beta Buys Salesforce.com Time To Fend Of Best of Breed Competitors.

Learning from the lessons of Siebel, Marc Benioff does not intend for SalesForce.com to be a one trick pony. Force.com represented a step to build an ecosystem and extend beyond CRM. Success in AppExchange proves out the strength of the ecosystem. With Chatter, Salesforce.com establishes a second foothold into the world of Social CRM and Enterprise 2.0. The pre-announcing in November bought Salesforce.com time to fend off best of breed collaboration solutions and emerging Social CRM vendors. Announcing a private beta with 100 customers, not only shows momentum, but also gives Salesforce.com time to prove out the solution. In any case, they SaaS leader buys time and can keep some of the best of breed solutions temporarily out of its accounts.

Your POV

Are you a Salesforce.com customer? How will you use chatter? When do you plan to deploy. Let us know if you need help with:

Building a multi-vendor SaaS strategy
Negotiating your Salesforce.com contract
Crafting a SaaS integration strategy

Please post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Related resources and links

20100125 Monday’s Musings: The Hidden Value in SaaS Deployments

20091222 Tuesday’s Tip: 10 Cloud and SaaS Apps Strategies For 2010

20091012 Research Report: Customer Bill of Rights – Software-as-a Service

20090602 Tuesday’s Tip: Now’s The Time To Consider SaaS Software Escrows

20081028 Tuesday’s Tip: SaaS – Integration Advice

20090714 Sandhill.com – R ‘Ray’ Wang – “Opinion: Moving to a SaaS Offensive”

20070903 Trends: What’s all the fuss about True SaaS, OnDemand, Hosting?

20091208 Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

20091109 Monday’s Musings: SaaS, SOA, Integration and How To Make A Peanut Butter And Jelly Sandwich In The Cloud

Monday’s Musings: The Hidden Value In SaaS Deployments

Published on January 25, 2010 by R "Ray" Wang

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 world through rich internet applications using Adobe Air, HTML 5, Microsoft Silverlight, and other tools.
Rapid implementation – SaaS applications focus on configuration and integration, not hard core implementation. Users can be up in weeks, not months.
Frequent cycles of innovation - At present, most vendors introduce new functionality, enhancements, and bug fixes on frequent refresh cycles. Some vendors provide as frequent as weekly updates, others – seasonal.
Minimal upgrade hassles – Users focus on minimal testing scenarios and receive updates all at once. In applications with significant regulatory and tax updates, SaaS applications reduce the cost of compliance by as much as 77%.
Always on deployment – Organizations can expect average up-time levels at 99.95% or higher for most applications. These results often exceed existing on-premise performance.
Subscription pricing – Subscription pricing reduces the capital burden of common on-premise payment models.
Scalability – Organizations can add or subtract users as needed without worrying about procuring new hardware and other infrastructure.

Moreover, latest Information Week Analytics survey reaffirms several key benefits of SaaS adoption – time to market and cost savings (see Figure 1).

Figure 1. Information Week Analytics Survey Confirms Trends In Adoption

…Yet, Aggregated Information Provides The Differentiated Value To Clients

Despite the obvious benefits with SaaS deployments, three hidden advantages will emerge with market maturity:

Benchmarking. SaaS vendors sit on a tremendous treasure trove of data. Participating organizations could opt-in to share secure and masked information for the purposes of business optimization.
Trending. Organizations could also opt-in to identify larger market trends. Trending information could be used to help organizations with planning.
Prediction. More sophisticated organizations will take SaaS vendor trending data and design new algorithms to support predictive analytics. The richness and consistency of the data set will improve accuracy.

The Bottom Line For SaaS Vendors – Create Additional Value As An Information Broker

The end game for SaaS vendors may not be a re-creation of the on-premise world in the Cloud. In fact, those vendors with a true multi-tenant SaaS model may turn out to find additional revenue streams as information brokers. Expect demand for premium information-on-demand services to begin with benchmarking and evolve to prediction. For example, imagine the benefits gained by organizations who consume the latest buying behavior data from their CRM vendors. Organizations could turn to HCM vendors for geographical salary or hiring trends. Customers of financial vendors could better predict credit risk factors. A key requirement – customers must trust their SaaS vendor’s data ownership and privacy policies before the industry makes this transformation. With acceptance, vendors will have more reasons to move to a SaaS offense.

The Bottom Line For Organizations – Determine Your Data Rights Before You Sign The Contract

Organizations in SaaS deployments will want to preserve the their data rights and minimize their cost structures to consume aggregated information. A few key areas should be considered:

Data usage. Organizations generally assume that the data belongs to the organization while the software belongs to the SaaS vendor. To be safe, organizations will want to be clear that rights to use data will require an organization’s permission. In addition, the disposition of data should be made clear
Data access. Organizations should expect unhindered access to raw data, queries, and extraction. Access to data should not require additional fees.
Aggregated data cost. Organizations participating in aggregated data programs should be given preferential treatment not only in cost, but also access to data. The cost of this “stone soup” approach should be factored in pricing.

Your POV

Where are you in your SaaS deployment? Have you thought about these long-term benefits? Looking for assistance with crafting, validating, or reviewing your SaaS Apps Strategy? Do you have a different point of view? Please post or send on to rwang0 at gmail dot com or r at softwareinsider dot org and we’ll keep your anonymity.

Other Useful SaaS Strategy Links

20091222 Tuesday’s Tip: 10 Cloud and SaaS Apps Strategies For 2010

20091012 Research Report: Customer Bill of Rights – Software-as-a Service

20090602 Tuesday’s Tip: Now’s The Time To Consider SaaS Software Escrows

20081028 Tuesday’s Tip: SaaS – Integration Advice

20090714 Sandhill.com – R ‘Ray’ Wang – “Opinion: Moving to a SaaS Offensive”

20070903 Trends: What’s all the fuss about True SaaS, OnDemand, Hosting?

20091208 Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

20091109 Monday’s Musings: SaaS, SOA, Integration and How To Make A Peanut Butter And Jelly Sandwich In The Cloud

Tuesday’s Tip: 10 Cloud and SaaS Apps Strategies For 2010

Published on December 22, 2009 by R "Ray" Wang

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 SLA guarantees and deal with a potential integration nightmare of hundreds if not thousands of potential SaaS apps. Though the 7 key benefits of SaaS outweigh most downside risks, organizations must design their SaaS apps strategies with the same rigor as any apps strategy. Just because deployment options have changed, this does not mean basic apps strategy is thrown out the window. Concepts such as SOA, business process orchestration, and enterprise architecture will be more important than ever. Here are 10 strategies to consider as organizations take SaaS mainstream:

Begin with the business process and desired business value. Understand the desired business value and outcome. Map back the key performance indicators (KPI’s) to the business processes. Identify what processes will be covered by the SaaS solution. Determine overlaps and hand-offs between on-premise and SaaS to SaaS that are required to measure the desired KPI’s.
Engage stakeholders early and often. Today’s apps strategies must constantly evolve. Change is happening so fast that line of business leads and IT leaders must collaborate in real time. The result – an ever changing list of requirements. While SaaS allows business leaders to make go-it-alone decisions, success will require close collaboration on short term and long term requirements, dependencies, and strategy.
Bet on future suites, SaaS platforms or PaaS (Platform-as-a-service). Winners and losers will emerge in this wave of Cloud computing. Vendors such as Netsuite, Workday, Zoho, Epicor, and SAP have built or will be building suites. They provide safe bets as more and more functionality will be rolled into their offerings. Concurrently, organizations should also choose vendors who bring a vibrant and rich ecosystem to the table because those vendors will win in the market. Salesforce.com and NetSuite already provide users with a platform to build on apps. Other vendors such as as Google Apps Engine, Microsoft Azure, IBM, and Zoho provide rich developer communities. Partner and customers will drive innovation which is why platform adoption (i.e. today’s middleware) makes a difference.
Augment with best of breeds, but avoid best of breed hell. No one platform can provide every solution, but choose wisely. Best of breeds provide deep vertical capabilities and rich last mile solutions. However, no one wants to manage hundreds of vendor relationships. Create frameworks that allow business users to work with vendors which support open standards, integrate well with your existing integration strategies, and follow the bill of rights. Reduction in the number of vendors will become a priority in 2010 going on into 2011.
Assume hybrid will be the rule not the exception. Prepare for hybrid deployments throughout the decade. Despite the benefits of SaaS and broad adoption in 2010, legacy apps will not go away. Just count the number of mainframe and client-server apps still in use today. Many on-premise apps will take time to migrate to SaaS. In some cases, legal requirements will prevent data from being stored off-site. Software plus services offerings from companies such as Infor, Lawson, Microsoft Dynamics, and SAP may become the norm in 2010 as companies seek private and public cloud solutions.
Design with good architecture. Keep your enterprise architects (EA’s) or hire some more. Inevitably, more and more SaaS solutions will enter the organization. EA’s will proactively plan for new scenarios and account for future business requirements. Organizations should keep some rigor in terms of standards for solution adoption while accounting for the need to rapidly innovate. Business leaders will need some frameworks on which solutions to adopt.
Choose the right integration strategy for the right time. SaaS integration strategies will evolve based on the organization’s SaaS adoption maturity. The first set of solutions will probably require point to point integration of data. Over time, users often migrate to centralized integration services that account for process. Some will go full enterprise service bus (ESB) and look at business process orchestration as well. Consider solutions from CastIron, Boomi, Pervasive Software, Informatica, and SnapLogic. Going forward customer data integration and master data management will be more important than ever.
Minimize long-term storage costs with archiving. Storage represents a significant long term SaaS cost. Savvy clients can reduce the cost of SaaS storage with a myriad of technologies such as EMC, IBM Optim, and RainStor. By archiving, organizations will experience faster transaction times, maintain compliance, and reduce storage fees.
Hedge risk with SaaS escrows. Most SaaS vendors will require 5 to 7 years to achieve profitability. End users often demand software escrows in the on-premise world when they are concerned about vendor viability, takeover threats, and other related breaches to performance or service level agreements. Software escrows vendors serve as the trusted third party independent organization which holds a copy of the software code. This often includes user data, source code, documentation and any application executables. SaaS escrows work in a similar way. Vendors such as EscrowTech, InnovaSafe, Iron Mountain, NCC Group. and OpSource can provide such services.
Protect your rights. Client – vendor relationships in SaaS are perpetual. Organizations have one shot to get the contract right and begin the relationship with the right tenor. Apply best practices from The Customer Bill of Rights: SaaS. Work with vendors to find the right balance in approach.

The Bottom Line For Customers – Build Frameworks That Support Easy Line Of Business Adoption

The broad adoption and trajectory of SaaS solutions requires organizations to rapidly replace edicts and 5 year plans with guidelines and policy frameworks. The goal – enable anyone in the organization to procure a SaaS solution that meets key guidelines and standards. The result – flexibility, security, and scalability that allows solutions to be used on-demand and in concert with existing applications.

Your POV.

As you work out your SaaS apps strategies, drop us a line and let us know how you are deploying, what challenges you’ve faced, and what successes have you achieved. We’re happy to weigh in. Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.