New, improved and a lot more customer-centric
I remember speaking at Northeastern University in Boston, where I was invited to speak at an entrepreneurship seminar by my dear friend and mentor, John Friar, in the late 90's. My fellow speakers were some of the bigger names in the technology business in those days - the erstwhile CEO's of Lycos and US Internetworking (Stephen McManus) now called USi- among them.
USi, as most of us will remember was one of the first, successful ASP companies that eschewed the “hosted model”. There were others, but their contention was the same, and quite simple - that instead of hiring an army of expensive consultants and technology staff, medium to large sized corporation could outsource the implementation, customization and management of complex enterprise systems, namely, ERP and CRM systems and save themselves some money and a lot of hassle.
Most of these companies despite their exaggerated valuations on Wall Street were critical in the evolution of technology as service (watch out for my new white paper on this topic) Companies such as Salesforce.com and Salesnet among others, benefited tremendously from lessons learnt by companies such as USi in the first iteration. (Forgive the usage of wave and iteration interchangeably)
Now, the third wave (the first typified by USi, the second by Salesforce.com) of Software as Service is coming our way, almost imperceptibly. Companies in this third iteration of Software as Service, era have made significant advances in many areas:
o In the first iteration, ASP companies offered big, complicated ERP and CRM systems that were designed to be implemented over months (if not years) at a customer site, with buy in of the major C level executives. The decision to purchase such solutions was a major one, often announced by a C-Level officer. These solutions were NOT designed for the hosted model, and when you changed a thousand business rules every month, as businesses sometimes must, the value proposition of a shared model simply fell apart. Then there was the complication of licensing software from the big enterprise applications vendors- it was a big mess.
o In the second iteration, companies led largely by Salesforce.com, took a much narrower or 'smaller' approach. They decided to offer a small range of very narrow functionality that could address problems faced by every company small, (medium) and large. Contact management, contact history, call logs, and other mundane, yet critical, sales processes were targeted.
o In the third iteration, that is underway, we see companies offering much greater functionality, from sales management to e-commerce capabilities to search engine optimization capabilities totally integrated with a retailers website. Now we are getting somewhere. Companies in this iteration have combined the benefits of the two previous iterations and eliminated some of the weaknesses. This is possible simply due to the evolution of technology (now 7 years since iteration 1) and more importantly a greater understanding of technology and hence faster adoption of these offerings by business people who have been around since the 90's. (Note the carefully avoided praise for my generation -Gen X). The reality here is that software vendors and customers have traveled some distance now, and have more experience to sift through the BS and get to the value (proposition) of a solution, in this case software-as-service.
To be continued….
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