Often the key to success in any business is finding a niche or chink in a big company’s armour and attack it, and/or exploit an inflection point in an industry. This is exactly what many of today’s Software as a Service vendors are doing, and the inflection point in the software industry began with Google, circa 1999. This is their opportunity but, as my grandfather used to say, “When the tide comes in you need to get on the outgoing tide otherwise you will miss your opportunity.” In those days he was fishing from sailing vessels and was totally dependent on the wind and tides. Today, business velocity has increased so dramatically in nearly all industries that companies need to move very fast, because Internet tides often offer short windows of opportunity. The question for SaS vendors is how long will their window of opportunity in the market going to last and is small business going to get more than a short tactical return on its IT investment? I would really appreciate your comments on this new model of delivering software. According to Gartner Group analyst Michael Moaz, during a recent global trip he determined that less than 2% of companies in 85 non EU and US countries are currently using SaS applications. This reflects an early market as US and EMEA based companies are early adopters of new technologies.

The first wave of what is called Software as a Service has hit the beach and it has been primarily focused on niche oriented business processes like sales CRM. This niche is currently dominated by a company that sells its solution with the adage of “no more software.” Salesforce.com has been very successful with its negative marketing campaign; however, in reality, they are still selling software, just with a utility model platform delivered from data centers, which form the building blocks of what information technology pundits are calling the cloud. There are many other SaS companies that are targeting niches, such as HR and ERP processes, but the reality for many small and large organizations is that they may quickly become road kill as the larger vendors enter and dominate the market. This was certainly the case during the early 1990’s when Microsoft slowly but surely wiped out nearly all personal productivity software vendors in their path.

The software delivery model for SaS is called a business process utility and there are already some great examples of BPUs (as we like call them in the software industry) that have been built by large vendors. For example, all of us are familiar with ADP and many companies outsource payroll services rather than deploying a SaS application. Payroll services are no longer a competitive business process and by outsourcing them companies don’t lose competitive advantage, but significantly and reduce payroll management costs. SAP and ADP teamed up to create one of the world’s largest BPUs and now thousands of companies leverage this service. BPUs  are a recent advance in the delivery of personal productivity applications to the PC desktop and mobile device. There are many short term tactical, and financial advantages to deploying SaS applications that promise to deliver IT without the traditional cost of IT, however, because the industry is still relatively new there is little research and findings to support the economics of SaS. In fact some industry pundits are now pontificating that when it comes to a business process that provides long-term and sustainable competitive advantage SaS may not be the answer. Small business owners need to understand that the current business process utility model platforms that SaS applications are being are built on are proprietary in nature. What that means is that integration of these applications into your existing IT infrastructure, call center or supply chain will present significant challenges and increased costs.

What are the economic benefits of SaS over?:

•    Outsourcing a business service
•    Outsourcing a business process
•    Hosting your own business process
•    Hosting your business process on an appliance
•    Building and hosting your business process  

These are all viable choices for small business and decisions are likely to be domain specific outside of some non-competitive horizontal business processes. But then again what business process is not competitive? We need to empower our sales force with all relevant customer, supplier and partner data, and a great HR platform helps us keep our most valuable resource, our people. There are many options for small business owners today; however, short term tactical niche SaS applications may not be the answer or the right IT investment to maintain competitive advantage and profitable growth in the long run.

Personality of Fish: Cross Disciplinary Research on Georges Bank

This might sound boring; however, it produced amazing insights into the early life history of these once important fish and brought together multiple scientists from various disciplines and took five years to complete. In 1984 our investigation embarked on the world’s first multi-disciplinary research study of larval cod and haddock that brought together, geo sedimentology, ichthyology, biological, physical and chemical oceanography. In 1989 we published The Ecology and Distribution of Juvenile Cod and Haddock in Relation to Sediment Type and Currents on Georges Bank. www.int-res.com/articles/meps/56/m056p001.pdf - This research effort involved several research vessels in addition to two submersibles that I have mentioned on previous posts, and involved a wide array of data collection ranging from dissolved oxygen levels to sediment type.

The personality of young cod and haddock is one that is elusive, hard to find and hard to see. We found the young juveniles gathering in loose groups only on certain sediment types at 70-100 meters in depth on the Georges Bank. We found them aggregated on primarily a loose pebble gravel deposit located on the Northeastern section of the Georges Bank. For several days we did dives to locate the juveniles and actually caught them on our video camera nearly invisible to the naked eye because they had changed their melanophores to match the sediment. Like the Angler fish I previously wrote about, they were seamlessly camouflaged into the sediment sitting on the bottom with little to no movement until we disturbed them with our sub’s servo propulsion. Why was this research so important? In our hopes of maintaining sustainable fisheries management, it enabled us to identify a key point and time on the Georges Bank where these juveniles could be impacted by bottom trawling fishing. Limiting bottom trawl and scallop drag fishing in this area during this sensitive time could help increase the size of juvenile cod and haddock year classes every year. Thoroughly understanding a biological ecosystem and all its parameters is just as important as thoroughly understanding your end to end business processes and how technology can optimize them for sustainable and profitable growth. Until next time, great selling and marketing in the age of the millennium.