Friday, July 18, 2008
Appirio backed by Sequoia Capital: What changes, what doesn’t.
Chris Barbin
In our first blog post as a Sequoia-backed company (news leaked today, press release coming Monday), we thought we’d answer a question we’ve been asking ourselves: What changes about Appirio? What doesn’t?
We have more to say about what doesn’t change than about what does. Sequoia’s backing is an endorsement of some unconventional core beliefs that we’ve been talking about (and blogging about) for months-- convictions about our market's potential, our business model, and our value proposition that absolutely won't change as a result of this announcement. What will change, however, is what you can expect from Appirio: more partners, more products, more talent, and of course more customer success.
What doesn’t change: Day-to-day life here at Appirio won’t change much. We continue to be focused on making our customers successful, developing innovative product and service offerings, forming deeper relationships with our partners, and finding and empowering great people. But we’re doing these things with new external validation about some of the core beliefs that make Appirio unique:
- Web platforms will enable the creation of important companies. Sequoia thinks big-- they measure success by the % of NASDAQ’s total market cap represented by Sequoia backed companies. We’ve blogged before about why we think web platforms have the potential to disrupt $1 trillion of IT spending—it’s great to have Sequoia’s endorsement of this vision.
- Products and services are complementary when powered by web platforms. Conventional wisdom holds that technology companies need to choose whether they are going to focus on products or services, and that VCs won’t invest in businesses that think professional services are important. We believe that this was true with on-premise software, but that the availability of web platforms makes a truly hybrid business model not only possible, but advantageous in successfully turning innovation into customer success, and customer success into further innovation.
- Focus on customer success matters. Appirio doesn’t have the portfolio of complex patents or the single product “big idea” that venture capitalists typically look for. What we do have is an unique approach and an outstanding team dedicated to making customers successful and driving product innovation in the rapidly growing market for on-demand solutions. This is what Sequoia found unique, and the core of what they are investing in.
What will change: So while it is mostly business as usual here at Appirio, you will notice a couple of changes in how we talk about and grow our business—Sequoia’s backing has empowered us to "think even bigger" about Appirio. While we’ll have a lot more to say about each of these topics over the next couple of months, we wanted to provide some hints of what new to expect from Appirio:
- More Partners: To date Appirio has been very focused on our partnership with Google and Salesforce, and we continue to believe that these two companies offer the most compelling web platforms on the market. But there’s much more to cloud computing than web platforms, and we’re excited to be exploring application and technology partnerships with some of the most innovative and successful companies in these parts of our industry. Stay tuned for more announcements in this area.
- More Products: Appirio’s product portfolio has been tremendously successful to date at introducing companies of all sizes to us and the potential to “connect the cloud.” We want to lower the barriers to trying these solutions, broaden the available market for their deployment, and use them to introduce even more companies to Appirio. At the same time, we’re enhancing our offerings to solve pain points we see at our customers every day, building the type of enterprise-class solutions around which we hope to build a big business.
- More Talent: Appirio has been successful thanks to a team willing to do things well outside their job description to get the job done. Now we’re looking to bring in some outstanding people to focus on what’s going to take our business to the next level: engineers looking to do amazing things with Google and Salesforce, consultants willing to do what it takes to make a customer successful, customer advocates looking to build community around our solutions, and marketing gurus with innovative ideas for how to get the word out about Appirio virally.
Labels: BusinessModels, PaaS, Software as a Service
Wednesday, July 09, 2008
Microsoft to Partners: We Still Don't Get SaaS
Chris Barbin
The on-premise titans trying to transition to on-demand face considerable challenges, well-documented in this blog and elsewhere. One of the most significant mistakes companies make trying to transition is pursuing a "hybrid" strategy. We've watched SAP and Oracle stumble into all sorts of problems trying to seek the middle ground, and now it seems Microsoft wants to join the party. Recently we were invited to listen to Microsoft's new CRM pitch , designed to recruit existing Salesforce.com partners. The pitch centers on a benign-sounding notion, the "power of choice" (see screenshot at left). Microsoft's lack of a choice (on-premise vs. SaaS) is the core issue. Choice when used in the context of technology architecture typically points to a vendor with a conflicted or transitional strategy. They're not quite ready to make the full commitment, so they spread their attention, development, marketing, and operations resources across fundamentally different paradigms.
What is deemed a choice actually represents a company trying to provide two conflicted models. Would you expect the company who sold you a backyard well to be able to offer a water utility? Would you expect the company who sold you a diesel generator to be able to offer you the benefits of a utility company? Nick Carr did a good job exploding the general myth of "choice" as an alternative to "progress" in The Big Switch, where he extends the electricity analogy to the current age of IT technologies.
We recently blogged, and were quoted in eWeek, saying that companies like Microsoft build "physically and emotionally closed solutions." This makes them unable to meet the challenges of tomorrow's enterprises.
A sign of this and that a company doesn't get SaaS is when it positions on-demand as a transition path to on-premise. This usually means:
- They are trying to not completely freak out their sales and management teams with the notion that their SaaS offering will cannibalize their traditional software.
- Their SaaS feature set is way behind their current on-premise product.
- They don't want a customer to think they made the wrong choice in selecting their on-premise product last year.
- They still don't get what SaaS means for their products, sales, operations and culture.
Microsoft was so brazen as to promote a financial incentive for partners who help customers move from on-demand to on-premise. Microsoft evidently considers this customer ripoff to be an "Opportunity for Success" for its partners (see second screenshot).
Again, the analogy to other utilities is useful: if a company tried to sell you the benefits of their electric or water grid as a "transition" to a bigger and better backyard well and generator, you'd have reason to question their commitment and ability to deliver the promised utility.
What could be more illustrative of this than Microsoft's attempts to put thin web front ends on on-premise solutions? Look at the screenshot below. This solution is really nothing more than diesel generator hooked up to a electric grid and pretending to be a utility (although this solution is apparently good enough for some other companies 'committed' to on-demand). At best this type of solutions is a stop gap measure; more likely, it demonstrates a lack of understanding for what is required to deliver SaaS to tomorrow's enterprise.
Labels: Google Apps, Microsoft Exchange, on-demand, oracle, SaaS, SAP
Thursday, July 03, 2008
Who is “fit” to provide enterprise apps?
Narinder Singh
The SaaS blogosphere has been abuzz these last couple of days discussing Sergey Solyanik’s assessment that Google’s culture is “not fit” for enterprise apps. We’ll say up front that Appirio runs our internal communication and collaboration using Google Apps, and have helped customers big and small do the same. We have been highly impressed with the quality, reliability, and rate of innovation in these tools, admire and respect the culture that created them, and have no hesitation calling them “enterprise ready.”
But we think that with all this talk about Google’s corporate culture, people are missing the real point—the culture of today’s traditional on-premise technology vendors is no longer “enterprise ready.”
Let me explain-- we believe that there is a cultural mismatch between the needs of today’s businesses and the cultures of traditional on-premise technology providers:
Today’s business needs agility, the culture of enterprise technology is anything but. As the global pace of change accelerates, business leaders need their IT staff and SI/ISV partners to be saying a lot more “yes” and a lot less “no.” It is no longer acceptable for an IT partner to make vague promises about a release 3 years out. When a CIO asked Hasso Plattner at the Churchill Club’s SaaS debate when he should move to SAP’s SaaS solutions, he was told to check back in “5 years, at least.” Is that what it means to have an “enterprise ready” culture?
Today’s business needs openness, the culture of enterprise technology is anything but. Traditional enterprise vendors have in their very DNA the idea that openness is dangerous to their business models. Businesses in all industries have accepted the notion of core vs. context—you focus on what you are good at and rely on seamless connections with a network of partners to provide the rest of your solution. Ironically, traditional enterprise software is one of the last industries to embrace this change. One of Hasso Plattner’s key lessons from SAP’s ill-fated experiment with SaaS is that “what is inside the system has to have a coverage level which is close to 100 percent,” he says. Openness will be there in name only—the intention is that everything you need is inside the system. Such a system has never existed, and never will. Is this what it means to have an “enterprise ready” culture?
So what does it mean to have an “enterprise-ready” culture? Of course, every traditional enterprise vendor wants to be agile and open, and many have made admirable strides in that direction, including SAP through its Developer Community and eSOA initiatives. And there is much more required to deliver enterprise solutions than agility and openness. There are the table stakes of reliability, security, and having a solution that meets a real business need. But today’s business requires IT partners with a culture that can do both-- be deeply rooted in agility and openness while delivering reliability, security, and business value. We think that Google and salesforce.com, the leaders in on-demand, have achieved this goal: Salesforce offers both trust.salesforce.com AND ideas.salesforce.com. Google offers highly innovative applications that scale like no traditional enterprise application will ever be able to.
But whether or not you agree with us that Google’s corporate culture is “enterprise ready," the real point is that its traditional on-premise competitors are most certainly not.
Labels: BusinessModels, Google, salesforce, SAP, Software, Software as a Service
Monday, June 23, 2008
Google and salesforce.com - Like Peanut Butter and Jelly
Jason Ouellette
Today, salesforce.com and Google announced a new toolkit to link Force.com applications to Google Apps. Now, Appirio already has five commercial applications that connect Google Apps and Salesforce.com. That's more than any other vendor, and three of our apps - Calendar Sync, CRM Dashboards, and Doc Search - rank in the top ten of all AppExchange downloads.
In the "old world" of on-premise software, this new toolkit might be viewed as a threat to Appirio's product portfolio. If any developer can now easily link up Salesforce.com and Google Apps, who needs Appirio's products?
In truth, though, we think it's great. Appirio was involved in early usage and validation of the new toolkit. We embedded it into a cool new Visualforce demo that will be shown in the keynote address of today's Tour De Force event in Santa Clara, and augmented our current product offerings with it. Our viewpoint is that basic connectivity does not, by itself, hold intrinsic value, but it's an essential ingredient in creating value.
My former employer, webMethods, made hundreds of millions of dollars essentially by connecting SAP and other ERP systems to one another, sitting on top of the basic connectivity provided by the vendors. By providing this toolkit, salesforce.com and Google will make it easier for innovators to build new and powerful business scenarios that weren't possible before.
With just a few lines of code - six, to be precise - we were able to bring Google calendar data onto a custom Visualforce page (view demo).
We're seeing lots of steps towards integrating the cloud. Salesforce orgs can now connect to one another, via S2S, announced earlier this year. Appirio connected salesforce.com with Amazon S3 via our Appirio Cloud Storage product. In the on-premise world, ubiquitous connectivity really wasn't possible. But in the SaaS world, on the Internet, information can be connected in a scalable way, allowing even small ISVs to create commercial-grade innovative solutions. We hope other vendors' SaaS platforms, either directly or through partners like Appirio, will bake in basic connectivity to one another. This lets us focus on solving problems that have vexed developers in the enterprise for years.
The rapidly increasing web of links among major SaaS vendors is starting to create a business-specific version of the "World Wide Computer" Nick Carr talks about in The Big Switch. If all of your business applications, living in the cloud, could freely collaborate, their collective intelligence would begin to outstrip what any single system could deliver.
Labels: API, GData, Google, Google Apps, salesforce.com