Adoption of SaaS and Cloud Computing Is Increasing

A new survey by Keynote Systems found that 48 percent of the respondents have already deployed, or plan to deploy applications or services via Cloud Computing or SaaS in the next six months. This finding not only reflects the heightened interest in SaaS and leveraging the Cloud Computing implementation model, but that companies are also planning to use more cost-effective application delivery models with the tight economy.

Performance ranked as a top concern for the study participants in providing a positive Web experience. Other important factors cited were fast access to content and applications, and security of applications. Only half of the survey respondents have a testing and monitoring solution in place to help ensure a positive user experience. Budget constraints and a lack of internal resources to manage a performance monitoring solution were given as reasons why companies do not have a solution in place.

More information on CRM can be found at www.CRMindustry.com

Worldwide SaaS Revenue in the Enterprise Application Markets Will Grow 27 Per Cent in 2008

Worldwide software-as-a-service (SaaS) revenue in the enterprise application markets* is on pace to surpass $6.4 billion in 2008, a 27 per cent increase from 2007 revenue of $5.1 billion, according to Gartner, Inc. The market is expected to more than double with SaaS revenue reaching $14.8 billion in 2012.

Gartner analysts said the adoption of SaaS is growing and evolving within the enterprise application markets as new entrants challenge incumbents, popularity increases, and interest for platform as a service grows.

Some of the key industry trends that contribute to the rapid growth of SaaS globally include businesses examining ways to reduce their IT capital expenditure budget, the increased availability of broadband which extends the viability of Web-based service solutions globally, and the demand from businesses to rapidly implement software which supports a specific business need.

The fastest-growing markets for SaaS are office suites and digital content creation (DCC), albeit from small bases. Gartner estimates that the revenue attributed to SaaS within the office suites market will reach 99.2 per cent compound annual growth rate (CAGR) from 2007 through 2012, with a total SaaS revenue reaching $1.9 billion in 2012. By 2012, Gartner estimates that web-based freeware such as Google Apps, Adobe Buzzword, ThinkFree, Zoho and SaaS offerings will account for 9 per cent market share of total software revenue. These offerings will coexist with traditional office products, such as Microsoft Office and complement the way individuals work today.

Gartner forecasts that the revenue attributed to SaaS in DCC market will be 96.1 per cent CAGR from 2007 through 2012

The content, communications and collaboration (CCC) markets remains the largest contributor to the overall SaaS enterprise application markets with revenue exceeding $2.1 billion in 2008, and it is expected to amount to $4.7 billion in 2012. It also shows the widest disparity of SaaS revenue generation, with SaaS representing 2 per cent to 3 per cent of enterprise content management (ECM) and more than 70 per cent of Web conferencing in 2007.

The second largest contributor to the overall SaaS enterprise application markets is customer relationship manager (CRM). In 2008, SaaS within the CRM industry is expected to exceed $1.7 billion in total software revenue. Gartner expects CRM SaaS revenue to exceed $3.2 billion in total software revenue in 2012.

More information on the Customer Relationship Management can be found at http://www.crmindustry.com/

Multi-Tenancy vs. Isolated Tenancy CRM

Hosted CRM manufacturer Salesforce.com is clearly the poster-child for the software as a service (SaaS) industry and has boasted its multi-tenant architecture as the undeniable standard for hosted software delivery. However, SAP has entered the SaaS industry with its Business ByDesign solution and trumpeted its isolated tenancy hosted delivery model as one of the most overarching advantages when compared to Salesforce.com.

The debates between multi-tenant and isolated tenant hosted delivery platforms are nothing new. However, the topic has transcended from a quiet conversation among industry pundits to a full scale debate among SaaS buyers and influencers. In a new survey conducted by CRM Landmark, 89% of respondents were already using at least some CRM functionality in a hosted environment, though several of these respondents were just in the implementation process. Of those already using hosted CRM, 82% were doing so in a multi-tenant architecture, 9% were using isolated tenancy, and 9% were unsure.

The multi-tenant hosting model claims to deliver the following advantages over isolated tenancy:

--Dependability and reliability. By mandating every customer operate on the same database, operating environment and software version, the hosting manufacturer is able to deliver greater standardization, operate with fewer variables and ensure a more reliable information system.

--Material cost savings. When all customers reside within a single database, there are material economies of scale related to both software procurement costs and IT administration (including provisioning, maintenance, tuning, trouble-shooting, evolution and systems management).

--Faster life cycle evolutions. By not supporting individual client applications and multiple software versions, resources can be more tightly focused.

Not to be over-shadowed, isolated-tenancy advocates point to their hosted software architectural advantages:

--Software versioning. Whereas multi-tenant CRM software solutions require all customers to share the same application version and all customers are upgraded en masse, isolated tenancy CRM systems generally support multiple versions of their software (usually the current version and the last one or two versions) and permit clients to accept or defer new version releases. Isolated tenant and multiple version support often appeal to those clients who have incurred system integration or software customization and want the opportunity to evaluate the ramifications of a new version release before being forced to the new version.

--Increased flexibility for access to information and system integration. Because isolated-tenancy CRM applications devote a dedicated and unique database to each customer installation, greater access to data with third party query tools, report writers and integration tools is permitted.

--No-limits customization. Unlike multi-tenant applications that include constraints that cannot be violated due to the shared database approach, isolated tenancy applications offer a 'no limits' software customization which generally implies both more flexible and lower cost customization.

Though the survey results were initially extremely mixed, some trends began to appear.

--Hosted CRM and ERP buyers show increased awareness in the multi-tenant versus isolated tenancy trade off. Over one-third of the respondents indicated that the tenancy model is or was included in their software selection evaluation.

--The smaller the customer, the more likely they gave less importance to this issue. The larger the client, the more likely they preferred or even demanded isolated tenancy.

--Security-conscious organizations such as health care, financial services and federal government seemed to show strong preference for isolated tenancy.
More information on Customer Realtionship Management can be found at www.CRMindustry.com

Economy To Significantly Slow US Online Holiday Sales

US online retail sales this holiday season will reach $44 billion, a 12 percent increase over last year and the slowest growth rate to date, according to Forrester Research, Inc.. This year's weakened growth is indicative of the difficult economic environment catching up with formerly resilient Web buyers.

Although US consumers are pessimistic about the health of the economy, they expressed a marked interest in the ability of the Web to save them money. Forty-eight percent of consumers surveyed, compared with 41 percent in 2007, said that they can find the best values and deals online. Additionally, 36 percent of consumers said that they would be more likely to shop online due to high gas prices, compared with 22 percent who expressed the same sentiment last year. Forrester expects that the majority of holiday online sales will be driven by shoppers who have previously purchased online, rather than first time online buyers.

More than two-thirds of consumers surveyed said that they are planning to spend more or about the same online as they did last year. Core holiday product categories such as clothing will remain top choices for online buyers, as well as books, DVDs/videos, music, gift certificates, and toys. Respondents also indicated that they will be seeking free shipping offers more often this year than last.

This year's annual holiday forecast was a collaboration between Forrester Research and JupiterResearch, now a Forrester Research company. Two surveys were conducted to measure the attitudes and expectations of online consumers during the upcoming holiday shopping season, which was defined as the months of November and December. The first survey was fielded in September 2008 and received 2,153 individual responses. The second survey was fielded in early October 2008 and received 1,042 individual responses.

More information on CRM can be found at www.CRMindustry.com

Cloud Computing Entering Period of Accelerating Adoption and Poised to Capture IT Spending Growth Over the Next Five Years

Cloud computing is reshaping the IT marketplace, creating new opportunities for suppliers and catalyzing changes in traditional IT offerings. Over the next five years, IDC expects spending on IT cloud services to grow almost threefold, reaching $42 billion by 2012 and accounting for 9% of revenues in five key market segments. More importantly, spending on cloud computing will accelerate throughout the forecast period, capturing 25% of IT spending growth in 2012 and nearly a third of growth the following year.

To determine how big the cloud computing opportunity might be, and what it will take to capture that opportunity, a broad group of IDC analysts collaborated on the development of a formal point of view on just what cloud computing is.

When people talk about cloud computing, they are usually referring to the online delivery and consumption models for business and consumer services. In most cases, however, the "computing" lies behind a more recognizable service, like banking or shopping or online storage. Accordingly, IDC believes it is important to distinguish between cloud services and the cloud computing environment that enables these services.

-- Cloud Services are the consumer and business products, services, and solutions that are delivered and consumed in real time over the Internet.

-- Cloud Computing is an emerging IT development, deployment, and delivery model, enabling real-time delivery of products, services, and solutions over the Internet.

The attributes of cloud services make the consumption of goods and services easier and cheaper – and often better – than through traditional delivery modes. These attributes also lower costs, simplify and accelerate access, enable fine-tuned provisioning, greatly increase the number and variety of available services, and improve the potential to integrate these services.

As the foundation for cloud services, cloud computing consists of a growing list of technologies and IT offerings that enable cloud services, including infrastructure systems (servers, storage, networks), application software, system and application management software, IP networks, and pricing agreements.

The shift toward cloud computing is being driven by three market forces: the search for growth (and revenues) in important new segments, including emerging markets like Brazil, Russia, India and China (BRIC) as well as the small and medium business (SMB) sector; the shortcomings of traditional approaches in capturing the growth in these increasingly important markets; and competitive pressures from new players with little to lose and everything to gain from pushing the new model.

IDC believes there are two principal opportunities for IT suppliers from the growth of cloud services. One area of opportunity for the IT supplier is to consider delivering its own IT products or services to customers via the cloud model. This means considering whether to get into the software-as-a-service (SaaS) business, the storage cloud business, the server cloud business, etc. The other area of opportunity for IT suppliers to consider is how its current and future offerings can support its customers' development, deployment, and delivery of a wide variety of business and consumer cloud services. In other words, providing the tools for others to get into the cloud services business.

To succeed, cloud services providers need to address a mixture of traditional and cloud concerns. According to survey respondents, the two most important things a cloud services provider can offer are competitive pricing and performance level assurances. These are followed by the ability to demonstrate an understanding of the customer's industry and the ability to move cloud services back on-premises if necessary.

More information on the Customer Relationship Management industry can be found at www.CRMindustry.com

Sales 2.0: Social Media for Knowledge Management and Sales Collaboration

As the proliferation of social computing has forever changed the way customers gain information and feedback concerning a particular company's products or services, sales representatives are challenged to sell to a prospect base that potentially knows as much, if not more, about the competitive landscape than the reps themselves. This new challenge has caused a number of companies to implement social media solutions within the enterprise as a way to more effectively connect sales representatives to the subject-matter experts they seek.

A recent study conducted by the Aberdeen Group reveals that 59% of Best-in-Class companies consider the use of social media collaboration tools within the sales department to be a priority to the organization, compared to 35% of all others. Aberdeen’s report reveals how top performing companies currently blend process and technology to achieve a higher level of collaboration and, ultimately, a superior sales performance.

The pressure to increase top-line revenue growth (63%) and improve overall sales productivity (60%) were identified by survey respondents as the top two pressures causing organizations to focus resources on the organizational capabilities and technology enablers use to improve sales performance. Nearly a third of respondents (32%) also cited the need to compete with increasing customer and prospect knowledge of products and competitive differentiators as a factor when determining spend on sales performance. Best-in-Class companies indicated that they currently implement formal and documented sales processes (66%), solicit the support of senior management for internal-facing social media solutions (55%), and currently have, or plan to have in the near future, defined performance metrics to measure the impact of social media on sales productivity.

The report demonstrates the value of collectively leveraging organizational practices in process, performance measurement, knowledge management, and technology to provide a foundation for sales success. By combining organizational capabilities with a strong focus on enterprise social media solutions, Best-in-Class companies are able to positively affect performance in average deal size and increase market share.

Study of Channel Chiefs Suggests Strategic Shift Toward Sales Effectiveness Needed in 2009

A new survey released by BLUEROADS and SiriusDecisions has demonstrated a clear link between the types of partner programs that top channel executives emphasize and their impact on revenue growth in the indirect channel. Of those executives surveyed who said they focused on sales ‘effectiveness’ strategic activities such as lead management and deal registration, 62 percent reported an increase in revenue in 2008.

Paradoxically, 80 percent of the channel investments by the vendors that were surveyed focused around tactical issues such as training, partner portals, and partner communication tools – all activities that simply automate the relationship with partners. Of those who focused investment on these types of ‘efficiency’ programs, only 40 percent reported an increase in channel revenue in 2008.

Nearly 60 percent of respondents recognize they need to spend more on sales effectiveness programs in 2009. However, their intended actions don’t necessarily support that goal. For example, training and partner content portals were among the top technology investments, yet these are often simply easy-to-implement infrastructure investments with limited return.

Several other data points from the survey point to the need for a change in focus away from efficiency initiatives for channel chiefs in 2009:

*Most are not measuring and monitoring the performance of leads or sales opportunities effectively

*Required reporting from the channel focuses merely on tactical pipeline and deal status, rather than on strategic issues such as lead acceptance and deal registration, which hampers the opportunity for vendor staff to provide high value sales support to the partner community.

BLUEROADS points to several key recommended investment areas that will help channel chiefs to boost effectiveness:

*Measurement of every partner, lead and opportunity KPI
*Generate high quality leads for the channel
*Rapid delivery of leads to channel
*Get each lead to the right partner every time
*Lead and opportunity accountability on the part of channel partners
*Protection from channel conflict
*Bi-directional accountability and benefit for all revenue generating programs
*Selling guidance and coaching to help partners accelerate sales cycles

More information on CRM can be found at http://www.crmindustry.com/

Companies Fail to Realize Customer Revenue Potential

The shift to Individualized Relationship Marketing (IRM) is one of the key preliminary findings from the Chief Marketing Officer (CMO) Council's new thought leadership initiative, "Precision Promotion: Timely, Targeted and Trackable," sponsored by the InfoPrint Solutions Company, a joint venture between IBM and Ricoh. Using more personalized, relevant and precise customer communication is a key strategy marketers intend to leverage to achieve greater revenue and profitability from existing customers.

The research is part of a multi-faceted program aimed at exploring strategies and techniques for customer revenue optimization, including integrating transactional print and electronic communications with personalized promotional marketing offers. To date, more than 600 sales and marketing professionals have completed the survey that focuses on the challenges, solutions and new strategies for realizing greater bottom line growth through deeper, more targeted communications with customers.

Among the key findings:

--Maximum revenue is still out of reach: Over 76 percent of marketers surveyed felt that they were not realizing the full revenue potential of their current customers. Over 10 percent claimed to not know at all.

--Strategy is getting personal: Messaging that is more personalized, relevant and precise is the top strategy marketers will deploy for achieving greater revenue and profitability according to 60 percent of the respondents. Marketers will also look to find new ways to up- or cross-sell current accounts (45 percent), address under-penetrated markets or new customer segments (41 percent), and will use more efficient channels or alternative media to engage (32 percent).

--Bribery won't lead to loyalty: As marketers look for new routes to customer loyalty, providing new inducements and incentives to do business will probably not factor into the strategic roadmap (9 percent of respondents).

--Good news for database marketing solution providers: Marketers will be introducing better segmentation, profiling and targeting strategies (60 percent of respondents), adding or improving database marketing systems (49 percent) and acquiring new analytics capabilities (30 percent) to better target and engage.

--Better news for direct marketing solution providers: Marketers also indicate continued investment in personalizing multi-channel communications (30 percent) and individualizing print, email, text messaging, call center or web interactions (26 percent).

More information on Customer Relationship Management (CRM) can be found at www.CRMindustry.com

Opportunity’s There for End-User Experience Management

Knoa, a provider of end-user experience and performance management software, has announced the findings of a survey conducted among IT executives and business stakeholders at Global 1000 companies. The goal of the survey was to gain insight into the impact of end-user experience on the results derived from CRM deployments.

Results of the survey clearly show that many enterprises find their end-users are having difficulties interacting with these systems. CRM systems are one of the most challenging of enterprise software deployments because so much of the end-user behavior necessary to drive results is essentially voluntary, say Knoa executives. All too often, adoption and effective use of CRM functionality is hampered by a below par end-user experience with the application.

A significant majority of the survey respondents, 65 percent, stated that end-users within their organizations complain about the usability and/or response time of their CRM system. And 60 percent of respondents expressed concerned that a lack of adoption and utilization of a CRM system causes the information to be inaccurate, or unrealistic.

The survey revealed that the stakeholders in CRM implementations recognize the importance of end-user experience, as only 16 percent are not attempting to measure end-user experience at all. But, the mechanisms in use to measure varied widely, with only 20 percent of survey respondents stating that they use an end-user monitoring technology.

Thirty percent of survey respondents said they use help desk logs to measure user experience. While an analysis of help desk logs will yield some insight, the approach is blind to those end-users who do not ask for help, who have opted out of using the application, or find non-compliant workarounds.

Fifty-three percent of respondents use survey techniques to measure the user experience. Surveys can emphasize the enterprise’s interest in end-user experience, but they can only capture limited data from the most engaged end-users who opt to respond. Too often techniques like surveys and sampling result in misleading data sets that leads to results that are not in the best interest of the business.

The research hinted that a certain degree of resignation creeps into the expectations of the stakeholders of CRM applications as the deployments mature through the application life cycle. Sixty-eight percent of survey respondents who have had their CRM system in place between two and five years reported that it was running smoothly. However, 55 percent of those very same respondents reported that the users of their CRM systems complain about usability and/or response time (versus 65%) for all respondents; and 67 percent of those respondents were concerned that a lack of adoption and utilization of CRM systems causes the information to be inaccurate, or unrealistic (versus 60% for the group).

Seventy-eight percent of enterprises surveyed said they would find accurate, global end-user metrics on the response times, quality issues and usability that the CRM users are actually experiencing to be extremely valuable or very useful.

More information on Customer Relationship Management can be found at http://www.crmindustry.com/

Over 80 Percent of Business Websites 'Throwing Away Sales', Survey Reveals

A new survey has found that 83 percent of businesses believe their websites are failing to convert enough visitor traffic into actual sales or enquiries, report online consultancy Backbone IT Group.

Only 15 percent of respondents expressed a high level of satisfaction with the amount of business being generated by their websites. Companies also feared that less than half of potential online sales were currently being achieved.

The survey, carried out by Backbone IT Group with assistance from Lancaster University, also highlights a lack of awareness in the wider business community of some of the more recent online marketing practices.

Although the majority of respondents were familiar with Search Engine Optimization (improving the quantity and quality of visitor traffic from search engines), only 42 percent had heard of Conversion Rate Optimization - which improves website performance so that more visitors are converted into customers.

Just 11 percent of sampled businesses were using some form of Conversion Rate Optimization, compared to 75 percent employing Search Engine Optimization - figures that Backbone believe must change in the face of the global credit crunch.

More information on Customer Relationship Management can be found at www.CRMindustry.com

Research Shows Green IT Initiatives are the Norm for Mid- to Large-Sized Businesses

Enterprise Management Associates (EMA), an IT management research and consulting firm, issued findings from new research focused on the advancement of “Green IT” initiatives. The study reveals an astounding 100 percent of surveyed IT professionals indicated plans for new Green IT deployments during the coming year.

EMA defines Green IT solutions as products, services and practices designed to improve the efficiency of computing resources in such a way as to reduce the environmental impact of IT utilization. Some of the more popular Green IT deployments include server consolidation, automated power management and virtualization.

According to the EMA survey, 57 percent of all organizations have already implemented a Green IT initiative. In addition, the organizations that have implemented Green IT solutions have seen, on average, a 19 percent decrease in energy costs. The research also indicates that the larger the organization, the greater likelihood it has implemented a Green IT solution. Results showed that of smaller companies with less than 2,500 employees, 39 percent have deployed Green IT solutions. On the other hand, 73 percent of companies with 10,000 or more employees have implemented Green IT solutions.

More information on CRM and the IT industry can be found at www.CRMindustry.com

More Than 60 Percent of Fortune 1000 Companies With a Web Site Will Connect to or Host a Form of Online Community by 2010

To do business with the growing "Generation Virtual" population, companies will need to provide, or connect to, social applications to attract and engage customers, gathering information about their future wants and needs to lead them toward products and services, according to Gartner, Inc. By 2010, more than 60 percent of Fortune 1,000 companies with a Web site will connect to or host some form of online community that can be utilized for customer relationship purposes.

However, establishing an online community isn’t without challenges. Gartner predicts that by 2010, more than 50 percent of companies that have established an online community will fail to establish mutual purpose, ultimately eroding customer and company values. To combat this, marketing organizations will need new skills to meet the needs of Generation Virtual.

Unlike previous generations, Generation Virtual (also known as Generation V) is not defined by age -- or gender, social demographic or geography -- but is based on demonstrated achievement, accomplishments and an increasing preference for the use of digital media channels to discover information, build knowledge and share insights. The definition of Generation V derives from the recognition that these common behaviors, attitudes and interests are starting to blend together in an online environment.

When doing business with Generation V, marketers will need to attract online personas by creating multiple, engaging online destinations and provide tools for Generation V individuals population to socialize and express their different personas. By creating these destinations, marketers can gain a deeper understanding of Generation V. Marketers should provide, or connect to, online destinations from selling-focused sites and community forums to brand-aware, persistent, 3-D virtual worlds to get customers to their sites and promote socialization in the community. From there, marketers can lead prospects to products and services while gathering relevant information about their future wants and needs.

More information on CRM can be found at www.CRMindustry.com

Survey Shows Blogs, Online Product Reviews Significantly Influence Mobile Phone Purchases

According to the September 2008 Ad-ology Media Influence on Consumer Choice survey, 60.5 percent of U.S. consumers who recently purchased a mobile or wireless phone said online product reviews and user comments had some or significant influence on their purchase decision. Nearly 30 percent also rated information from blogs with the same level of influence.

Other key findings from the survey:

• Consumers who rated online blogs and reviews highly tend to be younger (18 to 34 years old) and have average or higher than average incomes.
• Television, newspapers, and direct mail advertisements were among the most influential traditional media for recent mobile phone buyers.
• 26.3 percent of consumers surveyed indicated they prefer to purchase mobile/wireless phones online instead of in person/at a store.
• Survey respondents also revealed product reviews, user comments, and blogs significantly influenced other consumer electronics purchases.
• The price of a cell phone was widely considered to be a less important buying factor than rate plans, coverage area, and mobile phone product quality.

More information on Customer Relationship Management can be found at www.CRMindustry.com