November 2006

Further Sage analysis

November 30, 2006 Cloud Computing/SaaS

I recall Paul Walker pretty much ducked a softball question about SFdC as competition: …we here in the U.S. forget that [Sage] they’re not only one of the major players in Europe, but generated more than $600mm in U.S. revenues this fiscal year…. and Saleslogix are two of the major incumbent brands among SMBs…many times when an SMB is making the decision to buy SfDC, it’s coming at the expense of Sage brands (and the de minimous organic growth for Sage would lend credence to that assertion)…. The incumbents don’t want to admit to losing share to the SaaS juggernaut, and SfDC would much rather focus on the wins against the big boys (which are perceived by the market as more significant)…. I can say from meeting Jason while in San Francisco and in continuing conversations we and others have over email, there are two things Jason will not tolerate: Inaccuracy that creates a false impression BS I leave it readers to judge for yourself whether Jason adds value to your consideration of this technology.

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All I want from Santa

November 30, 2006 General

So now you can tell all your luddite clients about Skype and save them a fortune in phone calls…. In between working my way through 3 types of headset which together add up to a fraction of this nifty device…. From a practice perspective, something like this could hammer communications cost between you and clients…. Beats the crap out of a bottle of scotch, a turkey, your 2007 calendar and FT customised diary don’t you think?

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The $100 laptop, SaaS and innovation

November 30, 2006 Cloud Computing/SaaS

Like most evolving trends, there is a goodly degree of debate: Nick Carr got off to a flying start, noting that McKinsey was about to report: Large companies appear to be jumping en masse onto the software-as-a-service bandwagon, according to a new survey of CIOs by management consultants McKinsey & Company…. SAPs Thomas Otter expresses his ‘confusion’ about the term SaaS David Terrar focuses on the financial case and its impact in the larger organisation Jason Wood looks at the economics, broadly agreeing with McKinsey but raising the odd alarm and wanting more market detail Phil Wainewright weighs in with some fascinating insights into where the market goes next. Vinnie Mirchandani disagrees with analysts and proposes an alternative based on his observations as a cost negotiator and outsourcing specialist Nick Carr whacks Thomas over the head with his idea of a clue stick: Thomas Otter, a smart technology blogger who works for the corporate software giant SAP in Germany, finds himself baffled and befuddled these days…. So for example, Phil had earlier referenced Winweb, saying: Whether it’s Intacct and National Bank of California speeding access to cash, Landslide enabling deal-closing processes or Winweb helping small businesses survive those crucial early years, all of these solutions focus on live business results that really matter to their customers.

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Under-performers

November 30, 2006 Innovation

Apart from the anomnymising of names, the emails content is shown as sent to me: I used to work, as a software developer, for XXXX, the providers of YYYY system used by ZZZZ. When XXXX and I parted company just on over a year and a half ago, XXXX were busy ramping up their marketing spend, whilst saving costs by cutting back severely on their development numbers…. That said, after we parted company, I had a good look around the AAAA market, and no one else in this space seemed to be any better…. It doesn’t matter whether my correspondent is looking at the world with a shotgun in his hand, no employee should be treated in such a manner that they feel it necessary to say this.

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Club fees

November 29, 2006 Cloud Computing/SaaS

The summary: Sage Accountants’ Club – £350 QuickBooks Professional Partner – £340.38 MYOB Professional Partner – £199 TAS Accountants Club – £549 including joining fee year 1, year 2> £349 IRIS Plus Partner – £495 Here is Nigel’s overall take: In return for your membership fee, all these intitiatives “give” you free copies of their current software and telephone support…. Some firms resell the accounts software alone and provide software support themselves, using the free telephone support on behalf of clients as and when needed…. However, beware of hidden costs as some schemes only provide a single-user copy for the basic fee, so if you want a mulit-user bureau version, you may have to pay up to £500 extra…. Most schemes run a “find an accountant” service on their website for scheme members, although I have yet to find an accountant who has derived new clients from this source.

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Sage's 'SaaS' play

November 29, 2006 General

From a customer perspective the difference between SaaS and current Sage offerings many not be that obvious…. Returning to Sage’s business strategy, it is only workable with additional acquisitions and sales because Sage can only persuade new customers to take the current offering on board. This is because existing customers are already familiar with the product and so don’t see a need to pay for a service from which they don’t benefit…. That seems to be borne out by the numbers: in 2006-7, Sage UK added 30.000 new customers on support (+9%) from 44,000 new customers (+6.7%) plus whatever it was able to winkle from the existing base.

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Sage results signal it is becoming services business

November 29, 2006 General

PBT came in at £221.6 million, shading the £220 million estimate from SG Securities who yesterday hammered the company in a report at The Independent: It urged investors to sell Sage stock ahead of tomorrow’s full year results. SG believes that the group is up against increasing competition, especially in the US from the likes of Microsoft, and warned that this could take a heavy toll on its profit margins…. Any R&D increase from Sage is welcome but recent problems with Line 50, 2007 suggest there is a need to improve software testing as part of the R&D process. More disappointing for me is that a year on and there is still no genuine commitment to SaaS for the core accounting product line.

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Tax madness – US style

November 29, 2006 General

Just to show that madness in the tax system is not restricted to the EU, Tracey Coenen shows this classic from Wisconsin. Referencing the Milwaukee Journal Sentinel, Tracey comments: [Sen] Erpenbach even goes so far as to claim that his tax increase will result in the following: “Most everybody, at the end of the day, will have more money in their pocket.” When has a tax increase ever put more money in people’s pockets? Count on this new tax to drive even more business away from our state.

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Big Four Blog on SOX

November 28, 2006 Uncategorized

I’m searching for new people and came across the Big Four Blog today. This story about SOX is old (November 14th) but worthwhile reading nonetheless: Today’s WSJ carries two substantive articles on Sarbanes Oxley and PCAOB / Big Four Firms. It is the very first item on the What’s News front page column, indicating the extraordinary importance of these topics to investors and the business community at large. We are pleased to see that the issues we write about in our blog are critical, timely and central to business and capital markets.

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