SCOOP: BT doing an AppExchange

by admin on January 24, 2007

in Innovation

Following on from yesterday’s BT Workspace discussion, I subsequently learned that BT is planning something that smells suspiciously like Salesforce.com AppExchange. Last week, some 200 ISVs assembled at Microsoft’s UK HQ at Thames Valley Park and were presented with the outline of BT’s plans. It goes something like this:

BT is looking to develop a marketing and distribution channel for ISVs who want to showcase SaaS offerings in the SMB space. This is a sales exercise at this time though it has been hinted that successful ISVs may find themselves acquired over time. Part of the argument they use revolves around IDCs assertion that SaaS is on the runway and in takeoff mode. Who wouldn’t be tempted given BTs reach?

I’ve been told that many of those in attendance are serving Jyoti Banerjee‘s M(edium) businesses in the SMB market. For example, CargoWise, an Australian logistics provider is looking at this as a way of helping it reduce sales and marketing costs. Twinfield is also looking at this as a channel to market. Twinfield could be a natural fit because as I’ve said many times, accounting is an infrastructure style service that should be delivered at commodity pricing but with the data providing the basis for developing specialist added value services.

Microsoft’s involvement is a little more intriguing. It clearly wants a slice of the pie and has a growing ‘startup’ unit. That will include Sharepoint Server, as mentioned by Mark Crofton yesterday in a discussion around hybrid applications. I’m not especially ‘anti-anyone’ in all of this. I have a major site under development that is running quite happily on .NET – of which more around 15th February. -:)

I spoke with Vinnie Mirchandani about this and while his initial reaction was ‘WOW’, Vinnie made it clear that large organisations have different priorities to the SMB market and so he’d be surprised to see interest from that segment. Vinnie also pointed out how telcos don’t have a successful track record in delivering services. I don’t entirely agree. France Telecom has done very well with the acquired Wanadoo (under Orange banner), turning it into a successful, if scruffy multi-retail media property.

BT has contracts out to attendees, which of itself doesn’t mean a thing. But then I’ve also heard that BT is approaching companies in the Bay Area claiming:

We have 27M consumer customers and 1.8M SMB customers and we are actively deploying SaaS and web 2.0 solutions/apps to these customers.

It’s worth repeating what I said yesterday: How successful BT is matters less than their aggressive validation of the on-demand story. Unlike past attempts, they are early in the game rather than trailing on behind. They have way more marketing clout than any other potential vendor and can safely position those all important blipverts well before the 9pm watershed.

Salesforce.com is not short of critics and its AppExchange platform has yet to prove itself as a viable distribution channel. There is, in other words, no contemporary example against which to test BTs theory. Even so, I find this intriguing because any serious level of traction will be disruptive. Unlike Vinnie, I’m less sceptical, taking the investors’ view that ‘past history doesn’t dictate future success or failure.’ I’d rather give them the chance to prove their bones before lashing them with past failure.

I don’t understand why neither Microsoft nor BT is shouting this from the rooftops. I know that working through all the layers is like walking through treacle which may explain the apparent tardiness in jumping on the SaaS bandwagon. It would also be an impediment to rolling out the platform.

Why no-one is making the obvious connection to SOA is beyond me. This is the mother of all SOA stories for a traditional telco. A technical infrastructure to support massive scaling of services, billing systems, customer service, high speed provisioning, service assurance – the list goes on and on.

For all the doubts, there’s no getting away from the opportunity, nor the threat to incumbent offerings in the SMB space. Potential on-ramp for 1.8+ SMB businesses works out at £324 million ($645 million) opportunity right now with BT Workplace. Imagine where that could go if BT/M$ get their marketing act together?

UPDATE: The ever watchful Thomas Otter reminds me that BT made a lame attempt to do this kind of thing in 1999. I’m sure Phil Wainewright will remind us of this in due course.

UPDATE 2: I can now say the original source for the start of this story was David Terrar with whom I was discussing this issue the other day. David provides richer perspective on both this and the BT Workspace articles.

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Ric January 24, 2007 at 10:24 am

I'm guessing that most of this work would have to have been in place before JP <a href="http://(http://confusedofcalcutta.com/)” target=”_blank”>(http://confusedofcalcutta.com/) moved to BT, but I'm sure there's a connection there somewhere.

David Tebbutt January 24, 2007 at 11:08 am

It's (in theory) even better than AppExchange – vendors aren't building atop the SalesForce.com platform.

I went to BT to see what a search for "Business Manager" would turn up. This is the 'lame attempt' you and Thomas referred to. Here are the results from searching the BT website with the SMB filter on:

1. Business Communications Manager
Find out about a communications solution which integrates voice and data functionality into one system, which meets your current needs but also has the capabilities to grow as your business changes.

2. Advanced phone systems for small to medium businesses
Browse our portfolio of advanced phone systems for small to medium businesses

3. BT Business IT Manager
BT Business IT Manager provides a complete service that encompasses every aspect of a small to medium business’ IT needs – from hardware supply and set up to advice and support for your systems.

4. IT Support Manager – Server
Don't let server issues prevent you from doing business. Our IT experts can help fix your server problems without even coming on site.
Similar pages

So, a 'lame attempt' it would appear to be. I wonder what happened to the people who signed up for it.

By the way, a link to David Terrar would have been nice. I suspect he may have had a hand in this story.

Phil Wainewright January 24, 2007 at 1:13 pm

Thanks for the links, Den – not only to my current website but also to the original BusinessManager news story that I wrote for ASPnews (cunningly credited to 'ASPNews staff' to give the impression I employed colleagues at the time).

There's more on the BusinessManager saga here (including an answer to Tebbo's question, 'what happened to the *person* who signed up for it'):
http://blogs.zdnet.com/SAAS/?p=14

I stand by my comments, by the way, in the closing paragraph of that blog entry:

"… telecoms companies across the globe have collectively sunk millions of dollars into similarly clueless initiatives, entirely without success. They are wasting their time even thinking about becoming application providers …"

However as Den says above, 'past history doesn't dictate future success or failure,' and I suppose it perhaps bodes well that BT is just getting on and doing this instead of making a big song-and-dance before establishing some market success. I would really like to see BT coming through and making this work, but its telco DNA will be getting in the way at every step.

David Terrar January 24, 2007 at 2:09 pm

There was good interest at the session. For example one of the companies queuing up with me to see the BT guy was Innovise, a more Enterprise oriented workforce management SaaS provider, looking to use Marketplace to help reach down to SMES more easily.

However, Thomas and Phil are right to mention failed innitiatives. BT are currently in the process of closing down BT Transact, an EDI style transaction exchange between customers and suppliers – just the sort of thing you would expect them to succeed at.

I'm hoping they make a success of both Workspace and Marketplace, but they've got some marketing to get right.

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