The emergence of independent software as a service (SaaS) providers has created a major competitive challenge for most of the established independent software vendors (ISV). The Wall Street Journal (WSJ) released a series of excerpts from a Microsoft internal memo, where Chairman Bill Gates warned his top executives of the SaaS threat. In these excerpts, Gates called on Microsoft to jump toward the trend of SaaS over the Internet. Some are comparing the memo to his call in the 1990s for Microsoft to embrace the Internet and in the early 2000s to embrace Web services. These calls led to the ubiquitous Microsoft Internet Explorer (IE) browser and Microsoft Service Network (MSN) on-line services, and Microsoft's .NET framework, respectively. Gates also demonstrated a type of "SaaS clairvoyance" in 1998, when he sent a fourteen page internal memo outlining a future, which included what he called a MegaServer, a gigantic server connected to the Internet that would allow on-demand delivery of any type of information to a user from any computer, television set-top box, palm-size personal computer (PC), or other device. A revealing e-mail from Microsoft's chief technical officer, Ray Ozzie, is also about software services, and is especially relevant in light of Bill Gates' memos (http://www.scripting.com/disruption/ozzie/TheInternetServicesDisruptio.htm).
This is Part Three of the four-part Software as Service Is Gaining Ground series.
Now Microsoft includes everything in its SaaS vision, from add-ons to future versions of Microsoft Office, to hosted Microsoft Exchange, to next-generation MSN services. Still, Microsoft's most recent unveiling of Microsoft Windows Live and Office Live ironically did not have much to do with offering Windows or Office as services, and consequently was received merely as a re-branding of MSN consumer services that are already available or under development. In addition to using the Microsoft SharePoint portal technology to support Office Live, Microsoft might tout its experience running enterprise-class services, including Office Live Meeting for Web conferencing and FrontBridge, a managed service focused around e-mail cleanliness. But because those services were obtained through acquisitions, the behemoth cannot point to native expertise in developing enterprise services.
In early 2006, Microsoft plans to release business services linked to internal deployments of Office, targeted at companies with ten or fewer employees. But, it is still unclear how it plans to turn its enterprise-class software into corporate services or how it will offer hosted services for its current collection of Windows Server System and Office System products. At least, the giant has indicated its intentions to bring Microsoft Dynamics CRM (formerly Microsoft CRM) and other business applications into the services fold to combat companies such as Salesforce.com, RightNow, NetSuite, and Salesnet.
However, many other larger vendors initially dismissed SaaS, application service providers (ASP), and other hosted arrangements as lightweight and unsuitable to enterprise-class customers. But they are gradually "reversing course". For instance, Siebel (soon to be part of Oracle) has already offered Siebel CRM OnDemand, which should come in handy for Oracle in terms of its hybrid on-premise/on-demand offering. Additionally, SAP has taken notice of vendors, like Salesforce.com, that are making notable headway in the SaaS market.
SAP's Pragmatic On-demand Approach
Until very recently SAP's SAP Hosting division was not competing directly in this area, since it did not provide a subscription-type service. Instead, it preferred to give cash strapped customers a lower entry cost, giving them the chance to spread out the software cost over a few years through SAP Financing programs. Moreover, SAP Hosting was positioned to provide more complete SAP-centric solutions including operation, application, and infrastructure management.
However, in early February, after nearly a year of flirting with the idea, and in line with its commitment to provide enterprise customers with solutions that meet both current and future business needs, SAP announced it was expanding its on-premise mySAP Customer Relationship Management (mySAP CRM) solution to include an on-demand option. The SAP CRM on-demand solution is designed to allow large and midsize organizations to manage sales, service, and marketing with an easy-to-use solution that is delivered directly via the Internet and is offered through a subscription-based licensing model.
In making the announcement, SAP unveiled its first on-demand product, the SAP Sales on-demand solution, which is designed to help organizations manage their customers, contacts, and sales pipelines with affordable, simple-to-use, and easy-to-configure tools. Available immediately, the on-demand sales solution will be followed by additional on-demand customer relationship management (CRM) offerings, including marketing and service products, intended for release in 2006 in quarterly waves. The SAP Sales on-demand solution is offered to customers on a $75 (USD) per user, per month pricing program based on pre-defined scope. The solution is available globally, with initial language options in English and German. Additional language-specific versions, including French, Japanese, Portuguese, Spanish, and Chinese versions, will be rolled out over the next three months or so.
The SAP Sales on-demand solution enables customers to rapidly meet traditional sales force automation (SFA) business needs, such as account and contact management, activity management, opportunity and pipeline management, calendar and task management, and sales analytics, to help companies better manage new and existing business opportunities, lead generation, sales execution, and client engagement. As expected, these core CRM features are served through a new user interface (UI) tailor-made for sales and marketing users, offering a variety of shortcuts and navigation aids and integration with desktop productivity applications for sales collaboration.
While somewhat late to the SaaS party, and only with basic SFA functionality for the time being, SAP claims to have at least created the first hybrid CRM solution that transcends the on-demand (i.e., immediate deployment, immediate business impact, and fast user adoption) versus on-premise (i.e., strongly customized solutions for differentiation, cross-functional data, analytics, and business processes, with a 360 degree view of the customer) debate, while integrating with core enterprise solutions in both deployment models.
To facilitate this hybrid approach, SAP has introduced the isolated tenancy model, which by having an additional database architectural layer, combines the high availability and low risk of a single-tenancy approach with the efficiencies and deployment speed of multi-tenancy architecture. SAP claims to have thus bridged the gap between single tenancy and multi-tenancy environments, bringing together the best of both worlds to meet the real requirements of enterprise customers today. The vendor acknowledges that customers appreciate the efficiencies of a SaaS model as found in today's niche, pure-play offerings, including speed of deployment, automatic software updates, and central management to help keep costs low. At the same time, customers are seeking the high availability, security, and low risk that come from the isolated and dedicated resources found in traditional hosting or single-tenancy environments. For enterprise customers, the knowledge that their systems' performance and continuous operations do not depend on the overall usage by other customers at any level, including the database level, is particularly important. With its new isolated tenancy approach, SAP hopes to give customers the benefits of centrally-served software, while delivering a level of independence, along with dedicated technology and resources that assure a safe environment.
Thus, though many observers have noticed a lack of functionality even when it comes to SFA (e.g., sales forecasting, lead routing, quotation management, workflow management, price calculation, other formulaic fields, etc.), SAP touts itself as the only provider whose on-premise and on-demand solutions are based on a common architecture, data model, and common UI. This should provide for a transition that is easy to manage, ensure continuity of data and processes, and minimize change management costs.
Another trait that might differentiate SAP is its flexibility, in that, unlike other vendors, SAP will not lock customers into long-term contracts for its on-demand offering. Furthermore, as one would expect (given SAP's larger on-premise install base), the solution was designed from the ground up to integrate (albeit with some tweaking) with enterprise systems, such as enterprise resource planning (ERP) and supply chain management (SCM) solutions, in order to deliver wider business process execution and improve the transparency of customer interaction. The idea behind this is to enable a seamless transition to on-premise deployment when the business is ready for more robust and strategic CRM capabilities. This continuity in customer relationships and adoption should be possible owing to the same data model, consistent user and administration data, consistent customizing and configuration, consistent functionality, and the fact that the UI and database structure are the same between SAP's on-demand and on-premise solutions, which is something that not many competitors can brag about. For instance, the likes of Salesforce.com do have application programming interfaces (API) that support Web services and are simple object access protocol (SOAP) and extensible markup language (XML) compliant, but, given the lack of, for example, an item master in these applications, there are many decisions to be made before truly integrating an order management process into these on-demand CRM applications.
SAP also announced that it has extended its long and proven strategic alliance with IBM in order to provide on-demand application hosting services for the SAP CRM on-demand solution. IBM will supply expertise in helping customers innovate, for example, in how they reap the benefits of their CRM deployments. IBM will also provide safe, secure, reliable, and highly-available hosting services—based on proven IBM eServers and DB2 database technology. The SAP solution will be powered by IBM's Applications On Demand Platform, which automates application hosting and management to provide a scalable and efficient platform for running business applications.
SOURCE:-
http://www.technologyevaluation.com/research/articles/software-as-a-service-for-customer-relationship-management-and-sales-18456/
This is Part Three of the four-part Software as Service Is Gaining Ground series.
Now Microsoft includes everything in its SaaS vision, from add-ons to future versions of Microsoft Office, to hosted Microsoft Exchange, to next-generation MSN services. Still, Microsoft's most recent unveiling of Microsoft Windows Live and Office Live ironically did not have much to do with offering Windows or Office as services, and consequently was received merely as a re-branding of MSN consumer services that are already available or under development. In addition to using the Microsoft SharePoint portal technology to support Office Live, Microsoft might tout its experience running enterprise-class services, including Office Live Meeting for Web conferencing and FrontBridge, a managed service focused around e-mail cleanliness. But because those services were obtained through acquisitions, the behemoth cannot point to native expertise in developing enterprise services.
In early 2006, Microsoft plans to release business services linked to internal deployments of Office, targeted at companies with ten or fewer employees. But, it is still unclear how it plans to turn its enterprise-class software into corporate services or how it will offer hosted services for its current collection of Windows Server System and Office System products. At least, the giant has indicated its intentions to bring Microsoft Dynamics CRM (formerly Microsoft CRM) and other business applications into the services fold to combat companies such as Salesforce.com, RightNow, NetSuite, and Salesnet.
However, many other larger vendors initially dismissed SaaS, application service providers (ASP), and other hosted arrangements as lightweight and unsuitable to enterprise-class customers. But they are gradually "reversing course". For instance, Siebel (soon to be part of Oracle) has already offered Siebel CRM OnDemand, which should come in handy for Oracle in terms of its hybrid on-premise/on-demand offering. Additionally, SAP has taken notice of vendors, like Salesforce.com, that are making notable headway in the SaaS market.
SAP's Pragmatic On-demand Approach
Until very recently SAP's SAP Hosting division was not competing directly in this area, since it did not provide a subscription-type service. Instead, it preferred to give cash strapped customers a lower entry cost, giving them the chance to spread out the software cost over a few years through SAP Financing programs. Moreover, SAP Hosting was positioned to provide more complete SAP-centric solutions including operation, application, and infrastructure management.
However, in early February, after nearly a year of flirting with the idea, and in line with its commitment to provide enterprise customers with solutions that meet both current and future business needs, SAP announced it was expanding its on-premise mySAP Customer Relationship Management (mySAP CRM) solution to include an on-demand option. The SAP CRM on-demand solution is designed to allow large and midsize organizations to manage sales, service, and marketing with an easy-to-use solution that is delivered directly via the Internet and is offered through a subscription-based licensing model.
In making the announcement, SAP unveiled its first on-demand product, the SAP Sales on-demand solution, which is designed to help organizations manage their customers, contacts, and sales pipelines with affordable, simple-to-use, and easy-to-configure tools. Available immediately, the on-demand sales solution will be followed by additional on-demand customer relationship management (CRM) offerings, including marketing and service products, intended for release in 2006 in quarterly waves. The SAP Sales on-demand solution is offered to customers on a $75 (USD) per user, per month pricing program based on pre-defined scope. The solution is available globally, with initial language options in English and German. Additional language-specific versions, including French, Japanese, Portuguese, Spanish, and Chinese versions, will be rolled out over the next three months or so.
The SAP Sales on-demand solution enables customers to rapidly meet traditional sales force automation (SFA) business needs, such as account and contact management, activity management, opportunity and pipeline management, calendar and task management, and sales analytics, to help companies better manage new and existing business opportunities, lead generation, sales execution, and client engagement. As expected, these core CRM features are served through a new user interface (UI) tailor-made for sales and marketing users, offering a variety of shortcuts and navigation aids and integration with desktop productivity applications for sales collaboration.
While somewhat late to the SaaS party, and only with basic SFA functionality for the time being, SAP claims to have at least created the first hybrid CRM solution that transcends the on-demand (i.e., immediate deployment, immediate business impact, and fast user adoption) versus on-premise (i.e., strongly customized solutions for differentiation, cross-functional data, analytics, and business processes, with a 360 degree view of the customer) debate, while integrating with core enterprise solutions in both deployment models.
To facilitate this hybrid approach, SAP has introduced the isolated tenancy model, which by having an additional database architectural layer, combines the high availability and low risk of a single-tenancy approach with the efficiencies and deployment speed of multi-tenancy architecture. SAP claims to have thus bridged the gap between single tenancy and multi-tenancy environments, bringing together the best of both worlds to meet the real requirements of enterprise customers today. The vendor acknowledges that customers appreciate the efficiencies of a SaaS model as found in today's niche, pure-play offerings, including speed of deployment, automatic software updates, and central management to help keep costs low. At the same time, customers are seeking the high availability, security, and low risk that come from the isolated and dedicated resources found in traditional hosting or single-tenancy environments. For enterprise customers, the knowledge that their systems' performance and continuous operations do not depend on the overall usage by other customers at any level, including the database level, is particularly important. With its new isolated tenancy approach, SAP hopes to give customers the benefits of centrally-served software, while delivering a level of independence, along with dedicated technology and resources that assure a safe environment.
Thus, though many observers have noticed a lack of functionality even when it comes to SFA (e.g., sales forecasting, lead routing, quotation management, workflow management, price calculation, other formulaic fields, etc.), SAP touts itself as the only provider whose on-premise and on-demand solutions are based on a common architecture, data model, and common UI. This should provide for a transition that is easy to manage, ensure continuity of data and processes, and minimize change management costs.
Another trait that might differentiate SAP is its flexibility, in that, unlike other vendors, SAP will not lock customers into long-term contracts for its on-demand offering. Furthermore, as one would expect (given SAP's larger on-premise install base), the solution was designed from the ground up to integrate (albeit with some tweaking) with enterprise systems, such as enterprise resource planning (ERP) and supply chain management (SCM) solutions, in order to deliver wider business process execution and improve the transparency of customer interaction. The idea behind this is to enable a seamless transition to on-premise deployment when the business is ready for more robust and strategic CRM capabilities. This continuity in customer relationships and adoption should be possible owing to the same data model, consistent user and administration data, consistent customizing and configuration, consistent functionality, and the fact that the UI and database structure are the same between SAP's on-demand and on-premise solutions, which is something that not many competitors can brag about. For instance, the likes of Salesforce.com do have application programming interfaces (API) that support Web services and are simple object access protocol (SOAP) and extensible markup language (XML) compliant, but, given the lack of, for example, an item master in these applications, there are many decisions to be made before truly integrating an order management process into these on-demand CRM applications.
SAP also announced that it has extended its long and proven strategic alliance with IBM in order to provide on-demand application hosting services for the SAP CRM on-demand solution. IBM will supply expertise in helping customers innovate, for example, in how they reap the benefits of their CRM deployments. IBM will also provide safe, secure, reliable, and highly-available hosting services—based on proven IBM eServers and DB2 database technology. The SAP solution will be powered by IBM's Applications On Demand Platform, which automates application hosting and management to provide a scalable and efficient platform for running business applications.
SOURCE:-
http://www.technologyevaluation.com/research/articles/software-as-a-service-for-customer-relationship-management-and-sales-18456/
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