Supporting the Outlook Client for Hosted Microsoft CRM 4.0?

This is just a quick post that is more of a question than a post.  I’ve talked to other CRM ISVs and CRM Hosters and there are differing opinions on how or whether to support the Outlook client.  The Outlook interface is a big selling point and makes the CRM experience much better in my opinion.  However, if you have ever been involved in technical support for Microsoft CRM, you know that the Outlook client is far and away the source of the most support issues.

Today, we applied Microsoft Dynamics CRM 4.0 Update Rollup 2 on our own CRM server.  I use the “Laptop Client” which has synchronization.  Just for grins, I tried to use the Outlook client after we updated the server but before I applied the update to the client.  As suspected, I got errors trying to go back online.

It is standard practice to have all clients go online prior to applying an Update Rollup.  That’s probably pretty workable at a small or medium business.  A few salespeople will forget but that’s ok since you can go around the office and fix up a few problems.  Deploying the update to all of your users is another task you’ll have to tackle.  In an on-premise implementation you can use group policy or some other method to push out the update.  But what about ISVs and Hosters?

If you are a hoster and you support the use of the Outlook client you have to deal with pushing out an update to all of your customers every two months when a new Update Rollup is released.  So, if you host CRM 4.0, here are my questions:

Do you support the Desktop Client, the Laptop Client, or both?

What do you use to push updates to your clients?

How do you handle the timing up of pushing out updates (update all servers then immediately push to clients)?

How do you handle notifying customers of an update?

How difficult has it been to support the Outlook client?

-Dan

ISV Hosting Toolkit for Microsoft Dynamics CRM – Part 1

The Proverbial Toolkit

In Part 1 of this series of posts I’ll summarize the parts of a toolkit an ISV needs for hosting Microsoft Dynamics CRM.  In the spirit of keeping my posts much shorter (based on good feedback), I’m going to break this topic down into bite-sized pieces.  I’ll follow-up with additional posts explaining in more detail the various pieces of the toolkit we built and some of the challenges we faced.

I mentioned in one of my first posts back in January, A Primer on Multitenancy for Microsoft Dynamics CRM, that at CourseMax we built an ordering, billing, and provisioning solution for our SaaS solution.  We host CourseMax ourselves at a colocation facility.  The toolkit is built almost entirely on Microsoft Dynamics CRM 4.0.  In other words, we use CRM to provision and manage CRM.  That’s an intersting paradigm, isn’t it.  I always found it fascinating to think about early programmers writing text editors (vi, ed, etc.  No, don’t even say “edlin”) that they would use to edit source code to build their text editor, to build their text editor, to build their…  Is that recursion?

Control Panels, Self-Service, and Free Trials

There are many vendors out there that offer software to hosters called “Control Panels“.  These are generic and sometimes extensible.  However, a control-panel is only part of the solution.  As an ISV, you want to offer customers a simple sign-up process that starts with a free-trial and is completely self-service.  That doesn’t mean you shouldn’t talk to them, but if they don’t ever want to talk to you, they don’t have to.  If they have to call you to order your software, many potential customers will move on to the next option, your competitor.

The Tools in the Toolbox

Here are the parts of an ISV Hosting Toolkit:

• Customer Sign-Up Forms
  • Free Trial, Buy Now
• Tenant Provisioning Workflow
  • Automatically Provision CRM Organization, Customizations, etc.
• Conversion Workflow
  • Can We Help, Free-Trial Expiring, …
• Free-Trial Conversion Form
  • Payment Method/Term, Process Payment, etc.
• Automatic Billing Workflow
  • Send Monthly/Semi-Annual Invoice
  • Send Invoice Reminders
  • Update Payment Status when paid
  • Disable CRM Organization (Payment late)
  • Redirect CRM URL to Payment Page (When grace period begins)
  • Backup CRM Database
  • Delete CRM Database (When grace period expires)
• Tenant Self-Service Seat Management
  • Manage Licenses (Increase/Decrease Number of Seats)
  • My Account
    • Account History
    • View Invoices
    • Pay Invoice
  • Manage CRM Users
    • Apply Licenses to Users
    • Add Users
    • Disable Users
• Operational Control Panel
  • Update Customizations on Multiple CRM Organizations
  • Deploy Reports…
  • Register Plug-Ins
  • Deploy Data-Maps

Making it Easy

The key is making it easy.  By that, I mean make it easy for you and easy for your customers.  That’s why computers were invented, wasn’t it.  Having a click/try/buy option on your website is a big advantage for you over your competitors that don’t have this option.  Having automatic billing means that you don’t have to hassle as much with billing and collections.  I promised to keep it short so that’s all for now…

Microsoft Released an “Update to the Update” of Rollup 2 for Microsoft Dynamics CRM 4.0

CRM 4.0 Rack in Colocation Data Center

Microsoft released a new version of Update Rollup 2 for Microsoft Dynamics CRM 4.0 on February 8th. The new version fixes some problems with UR2.   The issues that were fixed were fairly minor.  Unless you were having troubles with a localized version, there weren’t any other major problems that a quick edit of web.config wouldn’t solve.

If the CRM team sticks to the 2 month update cycle, we should see Update Rollup 3 in about month. I’m not really used to this short cycle of updates yet. However, I do like the idea of doing a rollup rather than individual hotfixes. My basic rule of thumb on installing CRM updates is that, if we don’t need it to fix a problem, wait for 3-4 weeks and let everyone else regression-test it (thanks everyone and please keep up the good work). If we are experiencing problems then we’ll test it first in our sandbox and make sure nothing breaks.

We’ll be installing the update to the update in the CourseMax data center this weekend. It’s a pretty involved process.  Here is the process we’ll go through:

• Apply the update in the sandbox
  • Since our CRM server roles are split up, we’ll have to install it four times)
• Run through the test plan on all four servers
• Apply the update on the production servers
  • Six different servers this time
• Run through the test plan again on Production

The test plan involves testing all of the various screens, triggering actions for plug-ins, testing workflows, testing e-mails and queues, and testing all of the external modules that hit the CRM web service, the Deployment Service, and the Discovery Service. Now you can understand why we wait until everyone else finds the problems first. We could test it in a single-role environment but that wouldn’t really do much good because we’d still need to run through the test plan twice in the hosting environment.  This is also why I’m not really comfortable yet with the 2 month update cycle.  I like to keep current with updates but it is a lot of work.  Keep in mind that this is in addition to the testing and updating we do for our own software. Our software consists of all of the plugins, workflows, scripts, sitemap customizations, etc. that make CourseMax CRM handle all the functions you need if you are a Training Organization.  If we would have installed the first version of Update Rollup 2 we would have had to go through this whole process twice within a month.

I was thinking about synchronizing the updates to the CourseMax software with Microsoft’s cycle.  The problem with doing that is that, if something does go wrong, it will be a nightmare because we won’t know whether it is our software causing the problem, the Microsoft update, or a combination of the two. By the way…In case you were wondering, our sandbox is a QA environment that mirrors our production environment. While it isn’t identical (4 servers instead of 6) to the production environment, it has all of the same server roles and exhibits the same network traffic. Our whole environment is virtualized using VMWare so it was pretty easy to copy it over. We just copied all of the virtual drives brought them up without network, then configured them on a separate VLAN. Since VMWare allows VLAN tagging, it is a completely soft configuration. The sandbox environment actually shares hardware with the production environment. Man I love virtualization…virtual servers, virtual LANs, virtualized storage (SAN). Everything is so much easier and efficient these days.

Here are the links to the new release of Update Rollup 2:
Informational post on the CRM Team Blog
Download Link

The new update fixes 2 problems found with the original update that was released on January 15th. The most common problem I was hearing about is that you could no longer publish workflows after the update if you had a custom web.config file. The fix was to add the following line to web.config in the authorized types section:

<authorizedType Assembly=”mscorlib, Version=2.0.0.0, Culture=neutral, PublicKeyToken=b77a5c561934e089″ Namespace=”System.Globalization” TypeName=”CultureInfo” Authorized=”True”/>

From the CRM Team Blog:

Update Rollup 2 for Microsoft Dynamics CRM 4.0
On 2/8/2008, the CRM Sustained Engineering team released a new version of the Update Rollup 2 packages. The new version of Update Rollup 2 addresses some of the issues that have been noted in the comments for this blog entry.

Including:

Strings in the localized product showing up as garbage or in English.

Customized web.config causing issues after Update Rollup 2 is installed

Customers do not need to uninstall the original Update Rollup 2 packages. The new packages will install over the top. If a customer has not been affected by the issues in the original Update Rollup 2 package they do not need to update to the new version. Customers can install Client, Server, Router Update Rollup 2 in any order…

An Inspired CRM Entrepreneur

Today I am inspired and I want to share my thoughts about what has led me to this point and why I am inspired.  Most entrepreneurs go through a pattern of trying something, struggling and failing, recovering from the damage, changing course, trying again, improving, failing, having some success, failing again, recovering, then rinse, repeat, and do it all over again.  If they learn from their mistakes, each cycle brings about a better result and new ideas.  You learn what not to do and you gain experience and insight.  If you’re an honest person with integrity, failure doesn’t usually mean some catastrophy where you go bankrupt and leave all of your customers, employees, partners, and vendors in the cold.  It might mean having a bad year then taking your business in a new direction.  Or, it might mean selling your business before you achieved all that you set out to do.

This has been my pattern although I’ve mostly kept the damages to a minimum.  Failing is a relative term and it really all depends on how you look at it.  As many others have said in many different and eloquent ways, you learn from every “failure” and it is only by failing that you grow and improve.  Success for most or all entrepreneurs is a red herring in any case since we’re all searching for some realization of a dream that is perfect in every sense.  Sergey Brinn and Bill Gates have achieved success beyond most people’s imagination but I’d be willing to bet that, while they have certainly had moments where they felt a great sense of accomplishment, they are still not completely fulfilled.  It’s what drives them.  You’ll work and struggle through all of the hard times and long hours for those great days when the vision becomes reality.

It’s the process of trial and error that results in the ideas and the execution of those ideas getting better and better.  If you are an entrepreneur (either in practice or in denial) I think a lot of what I’m saying will resonate with you.  Actually, I think everyone is really an entrepreneur, it’s just that most of the population is in denial.  In their heart, everyone on the planet wants to create something and leave their mark on the world in some form.  So, in my mind, everyone has an entrepreneurial spirit inside them, we just vary in the degree in which we supress it.  Every entrepreneur I’ve listened to or read about has the desire to build or create something.  It isn’t about getting rich and impressing your friends with the “pimp ride” you drive.  Then again, that might be nice <insert smirk here>.  Money alone isn’t enough to drive someone to take unnatural risks.  It’s about coming up with a great idea and turning it into something that other people will love and maybe even pay you for.  You get to share that feeling of accomplishment with all of the people that helped you develop the vision and make the vision a reality which is even better.

As I write this post, I have the feeling that I have a complete vision of the best business concept or model I have ever pulled together.  I didn’t sit down in a coffee shop with some buddies on Sandhill road and come up with it over a couple chocolate mocha lattes.  It is a “vision” or clarity that is the confluence of many bits, pieces of information or concepts that have come from my experiences with customers and colleagues, things that I’ve read, and successful patterns that have worked for other companies.  There is a point when a whole bunch of ideas come together and turn into a simple yet elegant concept.  That happened yesterday and once it did that’s when the inspiration came.  When you are inspired, the challenges that once looked so large immediately become small because you can see your way through them so easily.  Now I can’t stop thinking about it and planning and working on it.  Everything I’ve done in the past and everything I’m doing now are part of this vision.  It isn’t about doing something completely new or something that hasn’t been done before.  It is about doing things in a different way, with a different approach.  It is in this new approach that suddenly makes the idea so compelling.

What makes a business or business model great?  Business books, magazines, and financial articles are filled with with financial formulas, PE ratios, and quarterly reports that we use to judge the value of a business.  Financial results are important and I’ll never go into a business where it isn’t likely that we’ll have a great return on our investment.  But when it comes down to it, what matters most is that people love what you make or do for them.  This is why I’m so inspired.  I’m inspired because this vision is about a business that’s good for our customers, our future employees, our vendors, and our partners.  I know people are going to love it and I know it will be successful.  Steve Jobs, who I admire in many ways, understands this concept probably better than anyone and that’s why we have iPods, iPhones, Macs, and Pixar movies that everyone loves.

A little over three years ago, at Intelligix (an IT services company I founded and sold before achieving all I set out to do) we, in working with a CRM customer of ours, Sunset Learning, came up with the concept for a new business called CourseMax with a vision to build great software for training companies that they could use to run their business better, make more sales, generate more profits, and provide better service to their customers.  We were smart enough to know that moving from a professional services business into a software product business would be really difficult but dumb enough to do it anyway.  Not only that, we were starting a Software as a Service (SasS) business back when I didn’t even know the term SaaS existed, if it did.  We just called it the ASP model or hosted software, which is the same thing in any case.  Needless to say, we made probably every mistake you can make.  It was more of an expensive hobby for me since I was still working full-time and then some at Intelligix until a year ago.

The concept of CourseMax evolved and we began to think about ways to use the software to connect these training companies with their customers, other training companies, and suppliers.  We thought about it as a “Training Marketplace”   What we didn’t understand completely was that we would also be creating a “social grid” for training.  At the time, Mark Zuckerberg and friends had just recently opened membership of facebook outside of Harvard and I certainly hadn’t heard about it.  What we were thinking about back then was an online marketplace and community that was tied in to a Customer Relationship Management (CRM) system.  This is one aspect of what people are now calling “Social CRM“.  It turned out that we didn’t have the money and I didn’t have the time to build out the marketplace and community aspect of the software at the time.

Fast forward to last spring and one thing led to another and the CRM group at Microsoft decided to help us so that we could develop a new version of our software on the newly released Microsoft Dynamics CRM 4.0 platform.  This version of CourseMax would have an integration with an online community that would be a channel for training companies to market and sell their services to professionals looking for training.  It would also be a way for these companies to connect with their customers, listen to their feedback, and provide these customers with great service.  The community was also designed to connect the training companies with freelance instructors and other suppliers that they need to deliver their training services.  We had to build a prototype in six weeks so that we could demonstrate it at Microsoft’s Worldwide Partner Conference in Houston.  I presented a working prototype on July 11th, 2008.  Since then, we’ve been hard at work developing and refining the software into a product that is ready for production.  We’ll be releasing the new version of the software to production in 2 weeks on February 23, 2009.

Releasing the new version of CourseMax is huge and will be a very important event.  I think people are going to love CourseMax.  Even though we are releasing a completely re-tooled software with everything we once thought we wanted to offer our customers, there is a ton more that we want to do with it.  We’ll look to the community and our customers to drive what we do next and the software will get better and better.

However, CourseMax and everything I just described is not THE vision or epiphany I had yesterday.  CourseMax is an important part of the vision.  The work we’ve done, the things we’ve learned, the software we’ve built, and the feedback from customers, beta testers, smart people at Microsoft, and thought-leaders in the CRM and social media space are all part of the vision.  However, the vision is much more far-reaching.  Where we go from here will help many more customers in an economy where they can use all the help they can get.  We’ve learned a lot and our approch going forward is going to be very new and very different.  No, I’m not going to spill the beans now but I know people are going to love it.

I can hardly stand not talking about it so, I’m going to post the fragments of ideas and concepts behind the inspiration on Twitter and here on my blog as we are working on getting everything ready until I reveal simple yet elegant concept and the details in early March.  I think it will be an interesting way to explain how the concept evolved and why it is powerful.  If you are on Twitter, I’m going to use the hashtag #CRM_Liberation and you can find me at twitter.com/danblake.

Is Microsoft Dynamics CRM the Right Platform for My Software Business?

The title of this post is a question I was asked by a software executive (Let’s call him Mike althought that isn’t his real name) recently. Mike is considering launching a new software application for a niche vertical industry and he wanted to get my feedback on the pros and cons of building their application using Microsoft Dynamics CRM as a platform. I’m intentionally omitting his real name and the vertical here because they are in “stealth mode”.

Mike called me after attending a webinar with Rick McCutcheon of Full Contact Selling speaking about Don’t Count the Customers You Reach – Reach the Customers Who Count. Rick mentioned CourseMax as a good example of a vertical CRM solution.

Microsoft Dynamics CRM 4.0 is a great platform for building industry vertical solutions that you can deploy in the SaaS (Software as a Service) or On-Premise model.  In the SaaS model, it fits into the category of “Platform as a Service” (PaaS) if you choose to work with one of Microsoft’s hosting partners.  You can also host it Microsoft Dynamics CRM in your own data center and use it as a SaaS platform.  Dynamics CRM is a good fit for many would-be applications but it is also frequently not right choice. 

The following are my Top 5 questions you should ask yourself when you are consider whether to build commercial software on the Microsoft Dynamics CRM Platform

1. Will customers be willing to spend $100 per month per user for this software?
2. Do customers need CRM features (sales force automation, marketing, customer service)?
3. Do most customers use Microsoft Outlook?
4. Do customers want a solution they can customize?
5. Do most customers use Internet Explorer

The Situation

So, here is the scenario for Mike’s business:

Competition:
There are two main players in the niche that you could describe with the following attributes:

Features: Old technology and a limited feature set
Customization: No customization, Not extensible
Workflow: Workflow non-existent in one, minimal in the other
Price: Low-price point ($295/user perpetual license)
Platform: Single-user desktop application, no common database for multiple users

Market:
Size: Fairly large niche market
Typical Customer Size: from 1 to 100 users (Small businesses)
Customer Attributes: Use the web extensively, Low-tech, not power users, sales people, good networkers

There are a lot of small businesses in the market for Mike’s software concept.  One strategy for approaching this market is to offer an easy to deploy, low-cost solution that you can sell over and over to these customers with little trouble.  They like to use the Internet and probably don’t want to deal with managing and maintaining hardware and software.  That has SaaS written all over it.

Don’t Play Their Game…Change the Game

The one thing that stands out in looking at the competitors is the price point of $295.  The two competitors have probably undercut everyone else out of the market.  For the two left standing, price is one of, if not the most important factor when they compete.  That’s the definition of a “red ocean” marketplace as defined in the popular business book  “Blue Ocean Strategy” by W. Chan Kim and Renée Mauborgne.  It’s called a red ocean because there are sharks swimming around battling over the same fish and there is blood all over the place.  This is not a market you want to be involved in if you are a start-up.  You can’t beat the big-entrenched players because you can’t compete with them on price.  Even if you could, who would want to be in a low-margin business like that? 

The only way you can win in this market is not to compete with them head-to-head.  You would have to redefine the market or create a new market by coming up with at a Blue Ocean Strategy.  A great example of Blue Ocean is the Nintendo Wii.  The Wii’s graphics aren’t nearly as good as the Sony Playstation or Microsoft’s XBOX.  The processor isn’t nearly as fast.  To a hard-core gamer, graphics and processing power are what they are looking for.  So then, why is the Wii so popular?  It isn’t the hard-core gamers that are buying the Wii, it is the rest of the world who aren’t hard-core gamers.  The Wii is fun and it is easy to use.  You don’t have to be hard-core, you can just plug it into your television set and start playing.  It’s popular with a whole different set of clientele and Nintendo isn’t competing in that red ocean.  They changed the game, went after an untapped and under-served market, and they’re sailing on calm seas in their nice, blue ocean.

Microsoft Dynamics CRM 4.0: Great Platform but Not Packaged Like a Platform…Yet

So then, how does this apply to Mike’s question?  If he builds his application on the Microsoft Dynamics CRM platform, he will have far more features/functionality than his competitors.  CRM 4.0 comes with a very powerful workflow engine, it’s highly customizable, it has built-in multi-tenancy, security model, form-builder, etc.  It is a full-blown, multi-user CRM application with far more features than Mike’s competition offers.  However, the price tag for Microsoft Dynamics CRM is $1,000 / user and a couple thousand for the server if you run it on premise and that doesn’t include labor for installation, support, etc.  If Mike offers it as a SaaS solution, he would have to charge at least $75/month and it probably isn’t worth doing unless he charges $100/month.  CRM Online and Partner-Hosted CRM cost approximately $55/month with no add-ons.  The problem is that, with Microsoft Dynamics CRM 4.0, Mike has no choice but to offer all of these features to his customers.  Well, let me put that another way…his customers are going to pay for these features whether or not Mike’s company offers them.  You see, CRM 4.0 isn’t really a platform, at least not in the way in which Microsoft packages and prices it.  From a technical sense, it is a great platform.  It has everything you need to rapidly build an application that can be offered in either the SaaS or On-Premise model.  However, until Microsoft de-couples the CRM functionality from the platform and allows you to pay for it that way, it doesn’t really make sense to use it as a platform if your customers don’t need the CRM stuff.  From what I can gather, Microsoft will be addressing this issue and offering CRM packaged as a platform when CRM Services are rolled out in Microsoft’s Azure services cloud.  However, the timing for Azure CRM services is supposed to coincide with the release of Microsoft Dynamics CRM 5.0.  I don’t expect a release of CRM 5.0 until at least Q1 2010 so we probably can’t start any serious development on Azure CRM services for quite some time and we don’t know what the pricing model will look like.

Will Mike’s customers be willing to pay $75 or $100 per month for the additional features.  This is question number one.  If you can’t answer “Yes” to that question then there’s no point to asking the rest of the questions.  The answer for Mike is a definite “maybe”.  The only way to know is to do some market research by asking around, calling people, posting questions to LinkedIn, etc.  Even then, you really don’t know until you actually start trying to sell the software.  You have to be careful that you are asking the right questions or you’ll get the right answer to the wrong question and waste a lot of money building it and finding out that no one will come.  But asking the potential customers is critical and it’s also a good way to “pre-market” your solution and generate some interest.

Answering the Question

Is there any Blue Ocean out there for Mike?  The following chart is a good way to visualize the your value proposition against the competition:

So we blow the competition away in features, customization, workflow, and multi-user capability.  But is this enough to offset the large difference in price?  The best way to know is to ask your potential customers.  However, when we ask the question, we would be smart to segment the market by the size of the customer and any other important attributes.  My guess is that the smaller shops, particularly the one-woman show types, will not be willing to pay a lot more to get the features, customization, and workflow capabilities.  They certainly won’t care about the multi-user functionality.  If these things are true, then Microsoft Dynamics CRM 4.0 is not a good choice of platform to go after the long-tail SOHO segment of this market.   On the other hand, Dynamics CRM 4.0 might be the best choice to go after the segment of the market with 10-100 users. 

These customers may be happy to pay the higher price because the multi-user database and other features increase their productivity or otherwise brings them enough value to justify the additional cost.  They are probably feeling some pain because each person on their staff has a different database and they can’t share information.  So the answer is probably to talk to these small businesses in the target range, explain the value proposition, and find out what they’d be willing to pay for your app.  If they’ll pay $2,000 per user or more for a perpetual license or $100 per user a month then you might have a viable business on the Microsoft Dynamics CRM platform.

Other Platform Options

If not Dynamics CRM then what would be the right choice of platform? 

SalesForce.com is an obvious alternative since they are a direct competitor to Microsoft in the CRM space.  However, you won’t find any price relief here.  SalesForce.com’s Force.com platform is more expensive than Microsoft Dynamics CRM.  Force.com has three pricing levels, $25, $50, and $75 per user per month.  The $25/month version is not viable for any likely scenario because it has limits of 1MB storage per user and 8 custom objects.  This follows the Salesforce.com strategyof low entry-level prices to get you hooked then once you’ve committed time and effort, you figure out that you need the much more costly version.  I’m not condemning SalesForce.com.  This is clearly a smart strategy and their pricing levels and limitations are published for anyone who takes the time to read them.  However, as a buyer you should beware and know what the cost structure looks like to remove the limits once you have reached them.  In SFDC’s favor, they have created AppExchange which is a marketplace where you can list your solution and customers can buy it.  Unfortunately, AppExchange is known for the large number of low-quality apps offered.

There are several other CRM solutions that can be used as an application platform.  You’ll probably run into the same scenario with these products as well in that they are as expensive or more expensive than Microsoft Dynamics CRM.

You could also look at open-source products such as SugarCRM.  The open-source version of the software itself is “free” but you’ll still need to consider the cost of hosting your solution.  The trouble with the open-source version is that it’s open-source.  The SugarCRM Partner FAQ page states:

“Any customizations to Commercial Open Source must be made available to the entire community free of charge. Many clients may view their customizations as a competitive advantage and would not want these made publicly available. This does not apply to the commercial license “

If you don’t want to give your intellectual property away to the general public, you’ll need to become a partner and resell the commercial versions of Sugar’s products.  There are, of course, fees involved here.  Like SFDC, Sugar has a marketplace where you can list and sell your application.  Interestingly, Sugar’s marketplace is called “SugarExchange” which sounds a lot like SFDC’s “AppExchange”.

If you don’t need the CRM functionality, there are many other options.  Google’s AppEngine is, like Microsoft’s Azure, immature, offers limited functionality, and is not yet released for production.  It is a community preview so you might not want to bet your business on it yet.  You’ll also have to develop your application in Python since that is currently the only supported development language.  The anticipated pricing model (found under Google’s Terms of Service Page) for Google AppEngine is true utility computing where you pay based on how much bandwidth, storage, and CPU cycles you use.  The best part of the pricing model is that it is absolutely free until you surpass some pretty sizable limits.  Your business will likely be hitting some pretty good revenue numbers by the time you have to start paying for anything.  That’s a great scenario for a start-up company.  I’ll be keeping an eye on AppEngine as the platform evolves.

There are many other players in the Platform as a Service space and more pop-up every day.  At some point, one or more of them may get enough traction to show up on my list of viable platforms.  They’ll need to prove that they have staying power before I would consider them or recommend them.

There’s always the old-fashioned way too.  You can build a completely custom application from the ground-up.  Your up-front capital expenditures are usually much higher in this model.  If you have the capital and don’t need the features of a CRM-based platform this might be your best option.  As with many things in life and business, there is no concrete answer to which platform is right for you.  You need to evaluate the alternatives, study your market, and choose the alternative that fits your situation best.