Archive for March, 2009
If you’ve ever purchased enterprise software, or been one of the hapless employees at your company tasked with learning a new business application, then chances are you’ve been introduced to the bizarre and Byzantine practice known as software training. All too often, this “training” is designed to make up for what the software lacks in usability. It occurs at your expense, in addition to the actual cost of the software. And it’s usually designed to make you feel hopelessly inadequate.
If any of this sounds familiar, you’ll get a kick out of a recent BusinessWeek.com article titled “What’s Terrible About Software Training.” The article is written in the form of a tongue-in-cheek “thank-you” letter from a fictional software company outlining the training options available to the customer that just purchased its software. The article begins:
“Thank you for purchasing this software product. We at MicroBugs are fully committed to ensuring that you use our product as effectively as possible. To accomplish this goal, we are providing you with some information concerning your software training.
“Training is absolutely required to use our products. Even though business applications have been around for decades, we at MicroBugs have done our very best to make the interface as difficult as we can so that it will be impossible for you to really figure out how to use the software without some training.”
Read the rest of the article here.
Of course, we at Mumboe believe that the true test of a software product is it’s usability. That means that software should be easy to try, easy to learn and easy to use, with minimal training required. Yet there are software vendors out there that build entire businesses out of charging for training. Some even name their training programs “universities”! They host annual conferences where you can learn the endless intricacies of their product, all in the name of making you more productive. Really? Is that how you want to spend your valuable time (and money) as a business?
Fortunately, the newest generation of SaaS providers are offering businesses feature-rich applications in simple, affordable packages. Increasingly, companies large and small are embracing these applications as an alternative to the expensive, complex software systems that require additional, and even more expensive, support and training. Those who have endured the traditional enterprise software training circus will find this a welcome a change.
Do you have a software training horror story? Tell us about it here!
March 30th, 2009
Author: admin
Jeff Kaplan, managing director of THINKstrategies and a SaaS expert, recently tackled some of the top myths about SaaS in an article for Computerworld. The article debunks common assumptions about SaaS that cause some customers to cling to costlier on-premise software, including:
SaaS is a fringe element: While many companies still view SaaS applications as relatively untried, the facts don’t bear this out. A recent survey conducted by Kaplan’s firm in conjunction with Cutter Consortium found that SaaS usage jumped from 32% of respondents in 2007 to 63% in 2008.
SaaS is a band aid: Many companies look at SaaS applications as a temporary solution until they can afford to buy a more expensive, on-premise version of the software. Yet over 90% of the survey respondents using SaaS said they were satisfied with the model and planned to renew their subscriptions and expand their use of SaaS offerings.
SaaS isn’t flexible: According to Kaplan, SaaS applications are increasingly customizable. However, he cautions against extensive customization of any application, saying that, “Many enterprises have customized their in-house applications to such a degree that the software can no longer be fully supported by the vendors, nor can it be easily upgraded.”
SaaS is for small companies only: Kaplan points out that large organizations are Salesforce.com’s fastest-growing customer category, and that last year, GE and Flextronics International announced companywide SaaS deployments.
SaaS isn’t secure: While data security is a concern for every business, Kaplan points out that in-house security often isn’t as robust as that offered by today’s SaaS applications, and that “There hasn’t been a major compromise of a SaaS operation reported yet, even as we continue to read regular accounts of security breaches in traditional IT environments.”
March 23rd, 2009
Author: admin
INC. recently ran an article showing how one company cut more than $400,000 from its IT budget by switching many of its previously on-premise hardware and software systems to cloud computing and SaaS applications. The company, 2nd Wind, is an exercise equipment retailer based in Minnesota.
When CFO Tom Kelly joined the company, he discovered that its technology systems were woefully out of date. However, he estimated that upgrading just the company’s email servers and software would cost north of $300,000. Instead, Kelly replaced many of the company’s systems with web-based alternatives. The article gives a detailed breakdown of 2nd Wind’s before and after IT costs, and provides a real eye-opening view of what on-premise systems can cost businesses:
However, cost was not Kelly’s only reason for making the switch. When he replaced 2nd Wind’s point of sale system, the article says, “Price was a factor, but Kelly says the most important thing is that the new system will provide valuable real-time access to retail data and will handle the data backup and security.”
This is a great point that often goes overlooked when companies are considering a SaaS application. Companies assume that SaaS is by nature not as secure or reliable as an on-premise solution, but that is often simply not the case. Many small businesses can’t afford the sophisticated and expensive controls that big enterprise IT departments employ, and in today’s economy, even corporate IT departments are finding their budgets slashed. Leading SaaS vendors store customer data in large commercial data centers with highly sophisticated digital and physical security, encryption and redundant backup services.
For example, Mumboe’s security measures include 256-bit encrypted, password-protected accounts; data storage using Amazon’s S3 service, and an account backup service that lets customers download their account data at any time. All of these measures are included in our application’s base price of only $24/user/month.
You can read the full INC. article here.
March 20th, 2009
Author: admin
Contract management is not necessarily the first item on a busy organization’s priority list, but a couple of recent news items highlight why it is critical to have a system for tracking and managing your important business agreements.
For example, an article in Federal Computer Week reports that the lack of contract management controls is among the troubles plaguing the Federal Emergency Management Agency (FEMA):
”Contracting documents are in disarray at the Federal Emergency Management Agency’s headquarters office, with the agency unable to find two-thirds of the files requested during a recent audit. Contracting officers at FEMA’s Washington office could not locate 16 of the 24 files the accounting firm Urbach Kahn and Werlin requested, according to the audit released March 13 by the Homeland Security Department’s inspector general.”
Apparently, the files the auditing firm did find were not in order either, saying that documentation was missing from most of the headquarters contract files. Read the full article here.
Another article reports that inaccurate contract management recently cost the State of Maryland more than $10 million in potential overpayments and undisclosed rebates from 2004-2007.
Losing track of important contractual commitments such as expiration dates, renewal dates and financial terms is all too easy when those details are buried in pages of legalese and stored in someone’s filing cabinet. Whether you’re a small business juggling employment, sales and service contracts, or a public corporation with stringent reporting requirements, good contract management can not only help you save time, it can reduce costly contract errors, protect your business from expensive legal claims, and ensure your hard-earned revenue isn’t being wasted.
March 16th, 2009
Author: admin
The economy has many businesses rethinking the way they purchase software applications. Now there’s evidence that even large, established software vendors are rethinking the way they sell it. An article on Computerworld.com highlights how even an industry giant like Microsoft is feeling the heat. “In an attempt to retain recession-hit companies seeking to opt out of their software maintenance contracts, Microsoft is wooing them by cutting the price of leasing software by as much as 26 percent.”
Maintenance contracts are a staple of traditional software licensing models, in which the software vendor charges the customer for ongoing support and updates to the software on top of the original license. According to the article, many corporate customers are attempting to cut costs by opting out of these contracts. Microsoft’s version is called “Software Assurance.” The company’s promotion, aimed at large enterprise customers, is designed to keep customers of Microsoft Office, Windows Vista and other software tied to these contracts, which the article says adds 25-30% per year to the base license cost.
Paul DeGroot, an analyst with the independent firm Directions on Microsoft, had this to say about the plan: “Microsoft’s discounts for its Enterprise Subscription Agreements are an all-out effort by the vendor to retain customers on some sort of plan. From Microsoft’s point of view, they’d rather have a low-priced subscription customer than a customer who simply didn’t renew their Software Assurance. They’re still making lots of money off it.”Apparently small and medium-sized businesses are being left out of the promotion – if you’re in this category, you still get to pay the full licensing and maintenance fees.
Or, you could simply opt for a SaaS alternative. With a SaaS application like Mumboe’s, you would pay a low monthly fee for the software, with no long-term maintenance contract required. There are no upfront license purchase required, so you can scale up or down as your business needs – not the software vendor’s profitability goals – dictate. You could also cancel your subscription anytime. Software updates and upgrades would be included in that price and available as soon as the company introduces them – so there are no big upgrade cycles to contend with.
Sound like a better option? Maybe that’s why demand for SaaS applications is growing so quickly, even among enterprise customers.
March 10th, 2009
Author: admin
Many companies are investing in Microsoft’s SharePoint Server as a content management and collaboration solution for their business. According to Microsoft’s site, “SharePoint Server 2007 provides a single, integrated location where employees can efficiently collaborate with team members, find organizational resources, search for experts and corporate information, manage content and workflow, and leverage business insight to make better-informed decisions.”
However, a recent market study by Information Architected (on behalf of AIIM and Oracle) found that “Half of the organizations using SharePoint experienced more effort and budget than expected in development of the SharePoint solution.” The study concludes that “File sharing, the genesis of SharePoint, is the only functionality that has gained any real traction within organizations.”
This echoes what we’ve been hearing from our customers. Too many companies purchase an application like SharePoint thinking that it offers a silver bullet for solving all of their content management and collaboration needs. But as Microsoft’s own pricing page shows, costs for the various components of the on-premise version of SharePoint can quickly add up. In November, the company introduced an on-demand version of the product as part of it’s Business Productivity Suite, designed to make the solution more affordable for smaller businesses. However, even that pricing model doesn’t include the true cost of implementing an application like SharePoint.
In many cases, what businesses discover is that a significant effort and additional investment is necessary to build the internal processes and workflows necessary to adapt the application for their business needs. As a result, they end up with a fairly rigid platform with limited functionality, not because the system doesn’t support it, but because of the level of effort and investment required to take advantage of those capabilities. Unfortunately, they’ve already made a big up front investment in licensing, maintenance and support and will never realize a full return.
March 5th, 2009
Author: admin
Last May, we wrote about our stance on source code escrow. A couple of big things have changed at Mumboe since that post, but not our stance on source code escrow. First, our pricing has gone down. That means the argument we made for the cost of our service related to the cost of escrow is even stronger. Second, we now offer an Account Backup service, making it easier for customers to download all of their account data any time they wish. We feel confident enough with the value of our service that we don’t need to trap customer data or lock our customers into a long-term subscription.
Mumboe's Account Backup Service
We ended the source code escrow post saying that we believe the more important topic will be the portability of data stored within SaaS applications. This morning I read an article titled Cloud computing: Don’t get caught without an exit strategy on Computerword.com which has some interesting comments on the data portability topic. Some of the ideas and thoughts are echoes of the same conversations we have with our customers, but I do want to emphasize a key point: Vendor “lock-in” is not a concept that is exclusively associated with SaaS and cloud computing vendors.
Most software applications and services, whether SaaS, on-premises or any other model, have switching barriers that can be included in the definition of “lock-in”. And I’m not only referring to the direct costs and fees associated with the change. How will your internal processes be affected? What will the migration of data involve? Just because your application or service is being provided on-premises does not mean you are immune to the same barriers to change. Be sure to take these questions into account when you’re evaluating your next software purchase.
March 3rd, 2009
Author: James
