SMBapps Blog

Microsoft disappointment

2005-07-29T12:25:00.000-04:00

Microsoft started to disappoint me as a shareholder about 5 years ago, and its recent unveiling of Windows Vista disappoints me in how it intends to regain leadership in the post-desktop era.

First off, each of those slides at the link above shows a 2nd or 3rd-rate effort in the domain in question -- trailing Google, Flickr, Google Desktop, and Google Suggest (or DOS if you're cynical) respectively. Furthermore, their existing web properties (e.g., MSN, Search, Virtual Earth, Hotmail) are all no better than 3rd place in their categories. When was Microsoft ever languishing in 3rd place in ANYTHING?

Microsoft has innovated greatly in the past -- spending lots on CD-ROM, mobile computing, push technology, etc. before their time. But the company seems stuck now.

Ballmer recently spoke of the "dialed up" pace of acquisitions, but I wonder if he shouldn't be thinking about divestiture.

Look at the chart for AT&T (NYSE:T) pre-1984 and post-1984 . Leaving inside the antitrust question, the Bell breakup was great for the company and the stock. Maybe it would do the same for Microsoft. What if Ballmer sold off Office and/or Server? Could he rejuvenate the company for the Web era, despite the loss of a third of his revenue?

Free Your Data

2005-04-27T16:34:00.000-04:00

You've probably heard this line:

The optimist says, "This is the best of all possible worlds," and the pessimist says, "I fear that is true."

A similar discussion goes on in a lot of companies about opening up their data via Web Services.

The optimist says, "People will use the data in ways we can't foresee," and the pessimist says, "I fear that is true."

In general, however, companies that have opened up their data are winning: see Amazon's AWS, Google's APIs, eBay's Dev Program, SalesForce.com's sforce, for example.

However, in the realm of the unforeseen, this usage of Amazon's web service is pretty out there: it generates color pictures using book covers as "pixels."

Vertical Marketing blog

2005-04-20T10:47:00.000-04:00

[slightly off-topic] I have started a separate blog covering small business marketing issues, with some focus on individual verticals. The information is useful both to small business owners as well as vendors selling solutions to them. Take a look at vertm.blogspot.com

VC and SaaS

2005-04-18T12:38:00.000-04:00

Just noticed a letter to the editor in the April 2005 issue of INC. Magazine. In it, the co-chair of StarVest Partners describes her firm as the lead investor (not counting Ellison) in NetSuite. She states that they were unable in 1999 to get a single Sand Hill Road venture capitalist to invest in the company.

We saw similar pushback in the early years of Constant Contact. My belief is that it was equal parts reluctance to fund software as a service (SaaS) companies and disinterest in small businesses as target customers. And in NetSuite's case, it was additionally hampered by the fact that they were then known as NetLedger and were competing in accounting with Silicon Valley superstar Intuit.

Of course, today the drawbacks of selling to SMBs (difficulties in reaching large numbers of them) pales in comparison to the hardships faced by enterprise software companies, whose customers have effectively shut their wallets. And is there anyone left who DOESN'T believe in SaaS, particular for SMBs where it perfectly matches the SMBs' twin desires: predictable, recurring costs and ability to outsource a part of their operation which is not their strength?

Ajax for Web Applications

2005-03-16T09:46:00.000-05:00

Everyone working on web applications needs to be aware of Ajax. Ajax is a term coined to describe an approach to getting much better interactivity in web applications....smooth scrolling, rapid refreshes, pre-cached data, you name it. At its core, it combines sophisticated client-side Javascript, asynchronous contact to the server using the XMLHTTP object, and DHTML.

It has gotten a lot of attention recently, and, more importantly, widespread examples of it are coming into use. Google Maps and Gmail are two notable examples of this technique. Even Lee Gomes of the Wall St. Journal has weighed in on Ajax recently, pointing out that Google is stealing Microsoft's thunder by setting the web development agenda and could possibly even replicate some of Microsoft's desktop application success.

So get ready for your clients or your CEOs to start asking for it, not necessarily by name. I expect that, by the end of the year, these techniques will be pervasive enough that any web apps not utilizing them will be at a competitive disadvantage.

The funny thing is: Microsoft tried to push DHTML and scripting SEVEN years ago as a way to counter the growth of Java applets for interactive web interfaces. Who could have guessed that it might haunt them down the road?

One drawback: even though all the pieces needed for Ajax are already in the browser, development is currently tedious. Javascript development tools are primitive, organized UI widget libraries are scarce (although there is a lot of free stuff out there), and the major Ajax practictioners all rely on tons of internally-developed "platform" code. Where are the component vendors and development tools?

Nice cross-platform DHTML UI suite

2005-01-13T14:38:00.000-05:00

Nice cross-platform DHTML UI suite: Coalesys' Mercury-UI. (Link to the developer's blog.)

Also, for anyone producing development tools, he makes a good argument for bundling controls or tools together.

BeyondVC: Delivering software as a service

2005-01-05T15:53:00.000-05:00

BeyondVC: Delivering software as a service

For any remaining skeptics about the value of "software as a service", check out this well-written piece. (The author invests in ASP companies but I think his points are solid regardless of bias.)

CRM Daily: NewsFactor Network - - Siebel Takes OnDemand Vertical

2004-09-29T16:15:00.000-04:00

CRM Daily: NewsFactor Network - - Siebel Takes OnDemand Vertical - Highlights importance of vertical focus if you want to be relevant to customers.

HUMOR: Google Interface circa 1960

2004-08-10T10:24:00.000-04:00

Google Interface circa 1960

Law of Three Microsoft Releases Not Repealed

2004-07-19T11:45:00.000-04:00

Larry O'Brien of SDTimes is generally on the ball, but he displays a surprisingly short memory in his column "Microsoft's Tablet Works Right Away".

In that column, he claims that Microsoft created the "usable, powerful and essentially bug-free" Tablet PC "on the first try." Not only is it more properly their third or fourth major try at building a useful pen-based platform, but his claim diminishes the hundreds of person-years of effort that Microsoft has invested, culminating in the current product.

I worked closely alongside Microsoft on early pen-based efforts from 1990-1995. Nearly all of the Tablet PC's features identified by O'Brien, including high-level SDK objects and the high-performance ink collection, were the result of feedback gathered 10 years ago, and many of them have appeared, in whole or in part, in Microsoft pen-based efforts predating the Tablet PC (e.g., Windows for Pen Computing, WinPad, Windows CE).

Like Moore's Law and Metcalfe's Law, the Law of Three Microsoft Releases has not been repealed, despite his claim otherwise.

Economist | Salesforce.com

2004-07-09T17:08:00.000-04:00

Overview of Salesforce.com and ASPs: good overview to introduce people to ASPs. Restates Siebel et al.'s objections to ASPs regarding integration.

Microsoft Buddies Up to ISVs

2004-07-09T16:23:00.000-04:00

Microsoft Pairs Employees and ISVs: This is a brilliant move, particularly for a massive company like Microsoft. Too often, smaller ISVs aren't able to "feel the love" from the larger partner. Additionally, in the online era, almost all of the day-to-day interaction between the two parties is handled via web pages, emails, and online forums.

About 10 years ago, I did a lot of work with Microsoft as a third-party developer, and we had an assigned contact person in what was then called the Developer Relations Group (DRG, now MSDN). It really showed me the value of having an actual person to work with, someone who is looking out for your interests. Any vendor with a third-party program should consider an
ISV Buddy program.

Combining Web Services

2004-07-06T14:20:00.000-04:00

Much of the excitement about web services is that we'll finally have a way to unlock disparate data sources. However, to really unlock them in a powerful way, we need to be able to combine them with other data sources. (For instance, this is the goal of many of the anti-terrorism data mining initiatives, although they need to be mindful of the privacy implications.)

Sure, some of the early web services efforts are bearing fruit for eBay, amazon.com, and Google. But utilizing them, for the most part, requires programming sophistication. Imagine, however, how much wider the usage of such web services could be if they could be accessed using an existing standard, like SQL, that is familiar to both programmers as well as non-programmers.

Where this really pays off is if you look to join various data sources from different providers. For instance, here's an example of a simple question that could be nearly instantly answered using this approach:

Find all books written by Fortune 500 CEOs.

Here's a pseudo-SQL query that gets us the data we want:

SELECT 

    BOOKS.NAME, BOOKS.AUTHOR, COMPANY.RANK

FROM 

    AMAZON.WS.BOOKS as BOOKS,

    FORTUNE.WS.CORPRANKINGS as COMPANY

WHERE 

    BOOKS.AUTHOR = COMPANY.CEO AND

    COMPANY.RANK <= 500

ORDER BY

    COMPANY.RANK

Of course, to make this work, there needs to be a lot of agreement on standard schema elements (e.g., the two different name fields) and how to efficiently join large non-local datasets (e.g., treatment of key fields, estimated size of "tables"), not to mention all the usual database nuances (e.g., handling co-authored books).

The basic point is that as more and more information sources expose themselves via web services APIs, it would be nice to move beyond the technology of SOAP, XML, and "WS"-prefixed acronyms and get to a point where mere mortals could efficiently manipulate this data.

salesforce.com IPO

2004-06-23T12:56:00.000-04:00

Good news for the "on demand" software market: Well-known ASP Salesforce.com went public this morning and is up over 30% at midday.

I'd love to hear from anyone who has evaluated CRM vendors, as a potential customer, and opted not to go with an ASP option.

CRN on Salesnet

2004-06-23T12:52:00.000-04:00

I blogged previously about SalesNet, but recently they've done even more to impress me, as this CRN article reports. In just the last few months, they've hit on three of my favorite themes: (a) vertical editions, (b) configuration tools, and (c) OEM partner editions. These are good lessons for all ASPs.

How Microsoft Lost the API War

2004-06-16T11:18:00.000-04:00

Joel on Software - How Microsoft Lost the API War

Joel Spolsky is consistently excellent on topics regarding software development, and this article offers a well-constructed (albeit long) argument that Microsoft no longer matters to developers.

Software Giants Eye the SMB Market

2004-06-01T14:26:00.000-04:00

Software Giants Eye the SMB Market: Data integration and analysis are becoming more important to SMBs, as this article points out. Additionally, vertical-market specificity is something that SMBs don't want to sacrifice. Service-provider hosted solutions can help address the integration issue, but ASPs need to make sure they aren't ignoring the vertical concerns.

CRN Interview: IBM Software's Steve Mills

2004-04-22T23:59:00.000-04:00

CRN Interview: IBM Software's Steve Mills: "People fail to recognize if you take out Microsoft's productivity stuff, the applications market was in the $100 billion range of end-user expenditures. SAP is biggest at $4 billion. If you add up the Top 10 biggies, 75 percent of the market is still made up of smaller companies. It's a huge small-business market for producing applications. And many of them are country-specific, many are industry-specific, they may be pan-geography but industry-narrow."

USATODAY.com - Software giants think small

2003-12-12T16:29:00.000-05:00

USATODAY.com - Software giants think small: Wonderful to see a business-section front page of a national newspaper about SMB software. It provides a good summary of the players and the challenges. (And the pictures of Krispy Kreme original glazed doughnuts are an added bonus!)

Javalobby News - 2003/12/02

2003-12-05T14:30:00.000-05:00

Javalobby News - 2003/12/02: J2EE's availability, always touted as being at "five nines" (99.999% uptime), is actually at "five eights" in practice. Yikes! A lot of this stems from the unmanageable complexity in J2EE.

About UI Designers and Programmers

2003-10-16T11:56:00.000-04:00

OK/Cancel makes some interesting points about the miscommunications that can occur between UI designers and software developers. Elsewhere, Alan Cooper has addressed the need for a truer definition of the title "architect" in pieces such as this one.

Salesnet Enters Small-Biz Market

2003-09-26T12:07:00.000-04:00

Salesnet Enters Small-Biz Market: Another solid ASP player decides to focus on small businesses. I've seen SalesNet and its workflow and sales process management are powerful, without being overbearing.

Week's Top News: NetLedger Debuts New Product, New Name

2003-09-19T15:28:00.000-04:00

Week'sNetLedger Debuts New Product, New Name NetLedger becomes NetSuite, improves their UI to include drag-n-drop and a portal-like feel.

Why is Intuit not hunting for big game

2003-09-16T10:08:00.000-04:00

Why is Intuit not hunting for big game: Charles Var, Intuit's Director of Corporate Communications, sheds some light on Intuit's position in the marketetplace, in this discussion (with good analysis) by Ramon Ray of SmallBizTechnology.com

Intuit Looks to Help You Keep Your Customers Satisfied

2003-09-04T15:05:00.000-04:00

Intuit Looks to Help You Keep Your Customers Satisfied: Announcing QuickBooks Customer Manager. "Intuit reports that less than 13 percent of QuickBooks financial software customers use CRM software, despite the fact that 89 percent regularly track customer information and 35 percent have investigated CRM applications. The survey also revealed that existing CRM solutions were considered either too complex to use or they focused too heavily on sales force management versus better serving customers."

Intuit chose to focus on a clear benefit to QB users ("better customer service") rather than pitching SFA or CRM, buzzwords that correspond to features not benefits.

Hopefully Intuit will make it possible for vertical market applications to build atop Customer Manager.

Software Process Management

2003-07-31T17:36:00.000-04:00

speeDEV is a great software process management tool, available inexpensively as either software you host or via their ASP service. I just went through a full demo and was floored! Integrates Requirements, Tasks, Project Planning, Issue Tracking, Workflow, and Time Tracking into one cohesive tool with a nice web interface.

Check out What is speeDEV?. The rest of their site is only so-so, so you may want to signup for an eval or talk to Joanna Davidson there to get a web demo. Only $65/month/user on an ASP basis!!

I brought the Rational suite into Roving and speeDEV looks much stronger at a fraction of the cost.

Microsoft makes a run at contact management

2003-07-22T16:40:00.000-04:00

First Look: Microsoft Office 2003 Small Business Edition: "Business Contact Manager — a new add-in that gives Outlook some of the account- and sales-tracking capability of rivals like Act or GoldMine"

If Microsoft can find a way to make Outlook a credible competitor to contact managers like ACT! or Goldmine, this will have a big impact on the SMB application space. Outlook has the advantage of being (1) very well-known, (2) easy to develop on top of, and (3) having a good look-and-feel (ACT! is especially vulnerable here).

A customer database is the heartof all vertical market applications. If Microsoft can give developers a solid platform, one that has the added advantage of already being on millions of desktops, then the impact of this will be substantial.

However, like all Microsoft 1.0 releases, there are some big downsides. "On the minus side, Business Contact Manager is strictly a single-user, non-networkable database for an individual manager or sales rep — if you want to share your contact or customer file with coworkers, you're referred to the created-for-much-bigger-companies Microsoft CRM. Between that and the lack of Act, GoldMine, or other import/export beyond the DOS-vintage comma-separated-text-file level, it looks like Microsoft has turned a potential home run into a solid double."

The virtue of invisible design

2003-07-15T22:39:00.000-04:00

Joel on Software - Friday, June 20, 2003: "Too many software developers just can't bring themselves to implement completely invisible features. They need to show off about what a great feature they just implemented, even at the cost of confusing people. Really great UI design disappears. It's a matter of taking away, not adding. Is this dialog any better than the Windows Help Find Setup Wizard?"

2003-07-15T16:54:00.000-04:00

Intelligent Enterprise Magazine - The Intelligent SMB: Opportunity Knocks: "We generally find either big companies running packages meant for really small ones, or companies trying to run with some creaky application that a long-gone consultant wrote five years ago.'"

This article is one of a stream of articles of the last 12 months, all about "big IT" finding growth by turning to SMBs.

2003-07-07T00:00:00.000-04:00

The way to make software more relevant to SMBs is to increase its specific vertical market relevance to the SMB. For an ASP-hosted app, this means opening up Web services APIs so that other apps (hosted or non-hosted) can consume this app, or otherwise link closely with it and its data.

For instance, I should be able to take specific domain knowledge for a particular industry and put together a highly-relevant sales application for that vertical by combining applications that do lead generation, CRM, web analytics, and email marketing, even if all are running at ASPs.

A few things are making this all happen right now:

ASPs are falling back into favor (again).
Web Services, despite the hype of the last 24 months, is real and is hitting its stride.
Post-bubble, the surviving ASPs are jockeying to see who can be a real platform, by becoming integral to other apps.

Here's some proof of this.....

News: Salesforce.com Unveils sforce Online Application Development Utility: "Sforce developers can also extend salesforce.com's functionality and integrate salesforce.com with other applications. " What's also novel here is that Salesforce will even play ASP for their partners, acting as a hosting provider for a little more than $50/user/month.

Intuit already has an XML-based integration strategy and is seeing more and more traction with their hosted edition of QuickBooks. And Microsoft's early partners are already cranking out a number of extensions to Microsoft CRM.

WebSideStory, the analytics ASP, has already announced integration with the Atomz content management service and also with salesforce.com.

NetLedger has gotten into the fray with an integration SDK, albeit one that is not obviously XML- or web-services-based at this time. But it's a smart move, as financial data is central to any SMB workflow. In fact, the aforementioned salesforce.com is providing accounting integration with QuickBooks and Great Plains.

2003-07-06T23:13:00.000-04:00

Two great articles on Intuit from Business 2.0's June 2003 issue (all pages are from Google's cache):

1. The Hottest CEO in Tech is a thorough backgrounder on Steve Bennett, current Intuit CEO. More importantly, it gives some insight on how he took a wonderfully customer-centric company and enabled them to keep that focus while adding reliability and scalability to their business process. Here are the additional pages of the article: 2 | 3 | 4 | 5. And how great is that? Krispy Kreme and Intuit in the same article!

2. Anyone in a product development role should read the sidebar Why Techies Don't Get Six Sigma

2003-07-06T22:55:00.000-04:00

How Big Tech Businesses Sell to Small Businesses: "Small and medium businesses — those with 10 to 200 employees — are said to offer significant new technology sales opportunities to larger tech firms, at least according to a recent study by Harte-Hanks."

2003-07-06T22:44:00.000-04:00

Here's a review of iBuilder. They provide an interesting suite of tools that can be used separately or in any combination to suit a business' unique needs: SiteBuilder, StoreBuilder, TrafficBuilder, and AffilateBuilder.

2003-07-06T22:40:00.000-04:00

Don't you just love it when two of your best friends decide to marry? That's how I felt when I saw that Amazon.com and Intuit were teaming to build a storefront to sell application software to small businesses.

It's a typical Amazon store-within-a-store-for-a-brand (much as they do with HP, Nintendo, Linksys, et al.). The storefront is a little bit thin right now, but I'm sure Intuit software partners, many of whom have been clamoring for better marketing help, will soon add their wares in droves. Best part: the storefront has some vertical market categorization, reinforcing the positioning that Intuit is taking, one wholeheartedly endorsed by many of us in the SMB space .

And while I'm on Intuit, in early September we will be able to finally get our hands on a book detailing the inside doings of this great company. The book is conveniently titled "Inside Intuit". HBS Press provides a description of the book.

While you're on Amazon pre-ordering that one, pick up Seth Godin's latest gem, Purple Cow. Right on the money about how remarkable products can market themselves. Nice light reading for the pool or beach!

2003-07-06T22:19:00.000-04:00

The Interland (nee' Trellix) team has always been one of the strongest players in the SMB online services game, and they are not showing any signs of slowing down. Besides Dan Bricklin's SMBmeta initiative (which I'll cover in the future), Interland has done a thorough survey of the online needs of small businesses, as covered by Small Business Computing.

2003-07-06T22:13:00.000-04:00

Small Business Computing just covered some Kelsey Group / Constat research about SMB's embracing search engine marketing. I wholeheartedly agree -- basically, the easiest path of customer acquisition online for many SMB's is to buy AdWords on Google.

2003-05-13T15:33:00.000-04:00

Some old links:

Forbes.com: IBM Follows The Money: "'SMB represented 22% of sales [in the first quarter], which has been steady for the past three quarters,' says Lautenbach. SMB revenue comprises everything IBM sells, including hardware, software and services. 'Compared to IBM as a whole it's safe to say we're lighter on services and heavier on some parts of hardware.' "

Also, CRMDaily.com did part one of a series (registration required) on the software needs of SMB's. It is entitled "Are SMB's Buying Big Software?".

The most important quote in the story is "Mid-size companies need functionality without complexity". I couldn't agree more.

Key stats include:

Less than 60% penetration of mid-market firms for CRM.
In the U.S. there are 62,000 companies with revenues between 100 and 500MM dollars.
Mid-market companies act more like big companies than small companies, in that mid-market companies buy software (e.g. CRM) for strategic reasons, whereas small businesses do it for tactical reasons (accomplish a single task).

So when you put that all together, the lesson for the mid-market vendors is: While your software may be sold like you're selling to a big company, it needs to work like a small business app, from ease-of-use and integration standpoints.