The Great SaaS Debate

I had dinner with GovDelivery’s (http://www.govdelivery.com) Scott Burns the evening before his keynote presentation at the SaaS/GOV 2008 Conference (http://www.siia.net/saasgov/2008/overview.asp). We chatted about a wide range of industry issues and trends, yet Scott really got me thinking when he asked, “What do you think the difference is between SaaS and ASP?”

They were basically the same, I said. In fact, no different than the utility computing solutions IBM hypes. Software as a Service (SaaS)…application service provider (ASP)…utility computing…all vendor-invented marketing speak designed to help customers compare different offerings and make a buy decision.

Scott had a different take. He explained that Software as a Service companies subscribe to a multi-tenant approach. They offer the same features and functionality to all users, who then benefit from a better managed, maintained and supported solution.

On the other hand, ASPs are a single-tenant offering. The solution is still hosted by the vendor and paid for by the customer via a monthly fee or on an as-used basis. However, the specific feature set is unique to the user.

OK…I get it. And I recognize the approach taken by a vendor (SaaS versus ASP) dramatically influences their product development strategy, as well as resources they need to invest in customer service and support. It’s why so many software firms introduce a SaaS solution to move away from customer-requested customization.

Do customers understand this difference? Do they even care? My experience tells me “no.”

Several years back Strategic Communications Group (Strategic) promoted American Management System’s Momentum financial management solution in the federal government market. We competed against ERP offerings from SAP, Oracle and Peoplesoft.

Time and time again, government RFPs were issued specifically requesting ERP software. Yet, the project requirements were exclusively financial management. It didn’t matter. ERP had buzz and the perception of delivering greater value. That’s what the customer was going to buy.

It’s important for every technology vendor to clearly define its market positioning and then remain steadfast in how it promotes itself. SaaS…ASP…utility computing provider? Before deciding on what to call your product talk with customers and prospects. What do they want to buy? It’s often easier (and less expensive) to adjust your business approach than to convince a prospect they need a different type of solution.

Yahoo's Fine Tuning

The NY Times published an interesting article this week about Yahoo's efforts to revamp their strategy in light of intense competitive threats from Google, Facebook and MySpace.

Trying to Fine Tune Yahoo
http://www.nytimes.com/2008/01/14/technology/14yahoo.html?_r=1&th=&adxnnl=1&oref=slogin&emc=th&adxnnlx=1200434697-f1BJfqK1jlu/X1Zv7RF4TQ

What I find interesting is that Yahoo has clearly lost the perception of leadership and momentum in the market. Yet they remain the most popular destination on the Internet for consumers.

"With 136 million people in the United States visiting its sites in November, Yahoo remains the most popular property on the Web, according to comScore, a company that tracks Internet traffic."

I see this as much as a public relations challenge for Yahoo, as it is a strategy, features and functionality issue. They need to be aggressive in explaining to the market how the site is evolving and then consistently demonstrate how they're making good on the promise.

Buyer Beware with Analyst Research

It is no secret industry analyst firms continue to be influential in the market. A positive review in a report or good standing on a Gartner magic quadrant can propel a company's sales and partnership programs, while contributing to corporate valuation.

Yet, it's also acknowledged that much of the research produced by analyst firms is influenced by the sponsoring vendor(s).

I wonder if this is the case with Forrester's report on the anticipated impact of virtual worlds like Second Life on business collaboration and operations.

Virtual worlds will soon be as important as Web to companies http://cwflyris.computerworld.com/t/2611318/408925/93897/2/

My take: analyst research remains valuable and a great source of intelligence. Yet, it should just be one of the factors a prospect, potential partner or investor considers when evaluating a vendor. In other words -- buyer beware.

Feds Move on Social Media

Federal Computer Week's Jason Miller just wrote an interesting article about the continued adoption of social media by the current administration as a means of connecting more directly with key constitutencies.

White House to Blog about Middle East Trip
Federal Computer Week
http://www.fcw.com/online/news/151238-1.html


What does this mean for systems integrators, professional services providers and technology vendors selling into the public sector? For starters, the ability to post comments on these government executive blogs is a good way to increase visibility and demonstrate thought leadership with a particular agency. A good first step to incorporate a social media program in your marketing mix is to identify a list of target blogs, monitor their content using a service like Bloglines and provide comment, as appropriate.

It also presents a business case for government-focused organizations to consider launching an executive blog. At Strategic Communications Group (Strategic), we're working with a provider of professional services to federal agencies to stand up a blog in support of a corporate launch campaign.

Mending Media Mistakes

It eventually happens to all public relations professionals. A corporate executive is misquoted in an article or a media outlet inadvertently reports an inaccurate fact or statistic. With traditional print media, your best hope was for a correction to be published in a future issue.

It’s different with Web-based media. Check out how the influential bloggers at GigaOM corrected a fact in their assessment of Monster.com’s acquisition of Affinity Labs.

The take-away here: it’s important to quickly take action if your company is misrepresented in an article. Contact the journalist, point out the inaccuracy and validate your suggested correction with supporting facts and/or a third-party resource.


Monster.com Pays $61M to Get into Social Networking
Posted: 04 Jan 2008 02:57 PM CST

Career site Monster Worldwide has bought social networking startup Affinity Labs for $61 million in cash, the two companies said today. A jobs site getting into business networking makes a little more sense than, for example, Cisco buying Tribe.net and Five Across, but the purchase price seems rather high. Affinity was just getting off the ground and had raised only $6 million from Mayfield Fund and Trinity Ventures.

Affinity Labs’ products consists of seven recently launched sites aimed at various professions, among them the informatively named NursingLink, PoliceLink and ArtBistro. None of them are seeing traction yet — VentureBeat reports fewer than 500,000 visitors per month in total.

Update: The company contacted us to say it has 800,000 visitors per month and about a million registered members. Affinity CEO Christopher Michel contended that the acquisition price was appropriate given Affinity was generating “not a small amount of revenue” through highly targeted advertising including email newsletters and lead-generation. He also pointed out that Goldman Sachs released an analyst note praising the acquisition.

At the same time, shares of Monster hit a two-year low today due to forecasted online recruitment declines.

There is some history here — Monster was already providing advertising to Affinity and Affinity was giving Monster account holders access to its sites. Further, Affinity CEO Christopher Michel had sold Military Advantage, also a Mayfield investment, to Monster for $39.5 million in 2004 after raising $31 million in funding, so maybe the shareholders were able to defer a better return to a few years later.

At last check, shares of Monster (MNST) were down $1.14 at $27.79.

LinkedIn Revisited

It has taken me nearly three years to become a junkie.

I first wrote about corporate social networking in April 2005 when I evaluated LinkedIn, Ryze and Jigsaw Data for their value as sales tools. At the time I concluded they had potential to facilitate networking, yet in no way could they replace the time and energy needed to cultivate meaningful business connections.

People do business with, invest in, work for or partner with companies they know and trust. Public relations establishes the connection and confers credibility. However, it doesn’t replace the bind of a personal relationship. This belief became the foundation of Strategic Communications Group’s (Strategic) Network of Relationships®, a proprietary business community for sales, recruitment, partnerships and teaming alliances.

In time, I began to receive invites each month from respected contacts inviting me to join their LinkedIn Network. The invites increased in number and frequency. Click…click…click, I accepted. I even sent out a few invites to new business prospects I had already met with and had an interest in representing. Click…click…click, they accepted.

My network comprised of my contacts and their contacts grew dramatically. LinkedIn began to introduce new features, such as a daily update of who in my network added contacts, a list of who viewed my profile, and an overview who is hiring and for what position. Rather than merely a tool to facilitate networking, LinkedIn evolved to become a source for market intelligence.

Then, the kicker: in December LinkedIn announced a partnership with BusinessWeek (http://www.btobonline.com/apps/pbcs.dll/article?AID=/20071214/FREE/71214001/1078/newsletter01) that will allow readers to connect with the people and businesses featured in the stories. The agreement represents the convergence of traditional and social media that will help make public relations results more measurable.

At Strategic, we’re now exploring ways to integrate LinkedIn with our business processes, including:

1. Helping clients develop LinkedIn profiles for their subject matter experts to maximize the impact of our media campaigns. We also plan on incorporating these profiles into press releases, op-eds, white papers and other content generated for clients.

2. Conducting rapid surveys to test a client’s positioning or messaging, prior to launching a campaign.

3. Leveraging the collective size and impact of our combined LinkedIn network to identify potential hires.

While I remain true to my conviction about the unequaled impact of a personal relationship, the value of a social networking site such as LinkedIn will continue to increase.

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