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 Â£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.