CRM 4.0 to CRM “5” Transition

According to my Twitter sources, Microsoft announced today, at Convergence 2010, that “CRM 5 will be released by the end of the year with CRM Online first then on-premise.”  Now that’s the first time I’ve heard the release date officially pinned down that precisely.  I’ve been hearing Q4 and even early Q4 2010 for a while now.

Early adopters in Microsoft’s Metro program (select ISVs, key partners, and customers) have been working with Community Technology Preview 3 for a few weeks now.  We should be seeing a widely-released Beta in the near future.  That puts a lot of ISVs, Customers, and Developers in a quandry about when to make the transition to working on the new product and what to do in the meantime.  At some point you will want to stop working on Microsoft Dynamics CRM 4.0 and start customizing, developing on, and implementing CRM “5”.

That leaves you with a few choices for what to do right now:

1. Plug Away: Keep Working on CRM 4.0
2. Wait: Do nothing until CRM “5” is released (i.e. put everything on hold)
3. Make the Move: Get your hands on CRM “5” asap and start working with the new version
4. Hybrid Approach: Work on some things, wait on others

You will obviously want to have all the information you can get about the new features in CRM 5.0 and how it compares with CRM 4.0.  Without adequate information, you are sure to make bad choices.  Here are a few examples:

• Developing an integration that is INCLUDED in CRM “5”
• Developing a feature that is INCLUDED in CRM “5”
• Developing code using the CRM 4.0 SDK that will be obsolete (while still probably backward compatible for one version) when CRM “5” is released
• Developing a UI customization that doesn’t upgrade well
• Developing something with a CRM 4.0 Architecture that would be much more efficient in a CRM “5” Architecture
• Leveraging CRM 4.0 customization capabilities that are depricated in CRM “5”

Unfortunately, if you are not an early adopter, your access to information is fairly limited.  All early adopters are under NDA and have agreed not to share information about the new version.  I, myself, have signed the NDA (CourseMax is in the Metro program) so I can’t divulge anything yet either unless it has already been made public.  However, all is not lost, as there is quite a bit of information you can find out on the web that Microsoft personnel have been willing to release.

The best source of information at this point is the CRM 5.0 SDK which isn’t publicly available yet.  Once the feature set is locked down, the muzzles will come off.  Until then, your next best source of information is the probably the “Statement of Direction” available to customers and partners:

PartnerSource:
https://mbs.microsoft.com/partnersource/marketing/statementofdirection/MD_CRM_SOD.htm

CustomerSource: https://mbs.microsoft.com/customersource/documentation/whitepapers/MSD_CRM4StatementOfDirection.htm

Quite a bit of information was released at PDC09 which has been blogged about all over.  There is also a lot of information from various Microsoft Bloggers:

CRM “5” Workflow on Channel 9, March 22, 2010, Simon Hutson, Dynamics CRM UK Blog

Microsoft Dynamics Offers a Preview of xRM Updates for CRM 5 at PDC09, November 2009, Microsoft Dynamics CRM Communities

A Sneak Preview of Microsoft Dynamics CRM 5.0: More Social Networking, Charts, Customer Service Capabilities, September 17, 2009, Katie Morell, MSDynamics World.com

An Early Look at CRM “5”, December, 2008, Ben Riga, Microsoft Dynamics CRM Team Blog

There are also a lot of loose lips out there so do some Bing searches and you’re sure to find a good bit of info out there.  I’m headed off to CRM “5” deep-dive training for ISVs at Directions Training Center (an awesome CourseMax CRM customer and top partner for Microsoft and other IT Training) in Chicago and looking forward to learning more about Microsoft Dynamics CRM “5” that I can’t talk about yet.

LinkedIn API’s are Open for Business

I got an email on Monday from LinkedIn that their API’s are “Open for Business”. We applied for access to their API over a year ago. We wanted to do some social networking mashups with CourseMax CRM and LinkedIn. However, LinkedIn never responded to our application and so I gave up, assuming they would never come around to opening up their platform to anyone but Tier 1 players. While LinkedIn still holds on to its status as the “Professional” social network, Facebook seems to be eating into their share of that crowd (at least in my circles). I think LinkedIn has a real fight on their hands now but “Better Late Than Never”. You can find the LinkedIn API page at: http://developer.linkedin.com/index.jspa

I can’t wait to see all of the cool CRM mashups. Hopefully the Social Networking Accelerator will be updated to include a rich integration with LinkedIn.

ISV Hosting Toolkit for Microsoft Dynamics CRM – Part 2

The Free Trial

A potential customer found your web site somehow.  Now is your chance so you better catch their attention before they leave.  So, put a link to a free trial or demo of your software where they’ll see it.

Get CourseMax or Try it Today!

On the CourseMax site, we show a link prominently everywhere someone might think about trying the software.  The experts say a graphical link on the top-right of the page works best.  The first option we offer them is a free trial but, if they are ready to buy it now, we give them that option too.

Once they click on one of these links, they are taken to a form where they fill out the minimum info we need to set them up with a free trial:

Buy CourseMax CRM or Get a Free 30-Day Trial

First Name:
Last Name:
Email:
Company:
CRM Organization Name:

We ask them for other pieces of information (phone, web site, etc.) but the above fields are the required fields on the form. Once this prospect submits the web form the application checks to see if the Organization Name is available (the CRM Org name must be unique), then creates an Account and Contact record in our CRM system and links the Contact as the Primary Contact for the account.

The Provisioning Workflow

There are some custom fields we added to the account record to deal with provisioning and billing.  The workflow triggers on an update of a field called “CreateOrganization”.  The Account record is actually created and saved first after the Primary Contact is created and linked then this field is updated and the record is saved again.

Each organization takes about 10 minutes to provision in the production environment.  The provisioning steps include:

• Check to see if another Org is Being Provisioned (<1 sec)
• Create CRM Organization (~4 minutes)
• Import & Publish Customizations (~4 minutes)
• Load & Register Plug-Ins (~1 minute)
• Import & Publish Security Roles (~30 sec)
• Create CRM User (~5 sec)
• Create CRM Queue, POP Account, & Configure Email Router (~ 2 sec)
• Update Account Provisioning Status to Completed (< 1 sec)
• Send Prospect an Email Confirmation (< 1 sec)
• Create a Bulk Delete Job in CRM Org (~14 sec)
• Import Configuration Entity Records (~3 sec)

I left out a bunch of small steps that are specific to CourseMax but this is the bulk of the workflow.  As you can see, the majority of the work and time is in creating the CRM organization and loading the customizations.  Both of these tasks run for 4 minutes. Loading and registering plug-in assemblies takes another minute.

Lessons Learned

One lesson we learned is that the deployment service is prone to timing out.  You can try adjusting the timout periods but that can lead to more problems.  If more than one organization was provisioned at a one time, the deployment service inevitably timed out.  We had to implement a sort of a FIFO queue to make sure one provisioning task was sent to the deployment service at a time.

We also had to execute several of these tasks locally on the server where the deployment or CRM web services are running.  That meant that we had to create our own web services on each of the servers which then ran a local process to call the CRM web services. So our workflow actually makes calls to our custom provisioning web services rather than calling the deployment service and CRM web services directly.

These steps eliminated the timeout problems we experienced initially and optimized the process.  If CourseMax becomes so popular that dozens of people are requesting free trials every hour and the queue length becomes an issue, we’ll have to look at intelligently scaling out across multiple deployment servers.  But that will be a good problem to have.

Next up…more details on the provisioning and customer conversion workflows.

2nd Incubation Week for Microsoft Dynamics CRM Platform Startups

Sanjay Jain, Microsoft ISV Architect Evangelist, announced the 2nd CRM incubation week event.

On popular demand after very successful 1st CRM Incubation Week, we are pleased to announce 2nd CRM Incubation Week (Boston, week of 20th, April)…

Check out Sanjay’s blog for details and to nominate your company to participate in the event.

I’m excited to be an advisor to the startup teams again.  Jim Steger, CRM Development expert from Sonoma Partners and co-author of the popular books Programming Microsoft Dynamics CRM 4.0, Working with Microsoft Dynamics(TM) CRM 4.0, and Microsoft® Dynamics(TM) CRM 4.0 Step by Step, and Ross Lotharius, CRM Expert from the award-winning CRM consultancy, Ascentium, will also be there as advisors.  There will also be a panel of investors and industry experts there to give advice.  Microsoft team members will also be there providing great advice, technical expertise, and giving you the opportunity to make great connections.

Sanjay and the rest of the Microsoft team orchestrated a fantastic event back in mid-December 2008 and I expect the 2nd event to be even better.  If you are a startup looking to build a vertical industry application on a PaaS platform, this event is an unbelievable way to kickstart your business.

For the first event, five startups were selected from a field of 50 applicants.  Each of those five startups were able to build a working, compelling prototype, get great advice on technology and business planning, make great connections and friendships, and generate buzz about their venture.  That’s a lot of value for the cost of a plane ticket and 4 nights at a hotel.  So hurry up and get your nomination in.  You don’t want to miss out on this opportunity.

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…

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.

Cloud Computing Pervasive In 2009?

Let’s say you and I are starting a business and we’re making plans to launch a great new piece of software that will change the world. Should we be thinking cloud platform? Will our software product/service be obsolete by the time we finish it if we don’t build it on Google or Microsoft or Amazon’s cloud? The answer to these questions depend a lot on what software we’re trying to build. But I’d argue that it depends even more on our customers and what they want.

If you are a technocrat, you probably do what I do all the time and underestimate how long it will take for the the business crowd to adopt new technology. There are lots of reasons why businesses still haven’t adopted SaaS and don’t even care to learn about what “cloud computing” means. One reason that SaaS is still not pervasive is the lack of single-sign-on or at least some common or easily federated directory service. If I get 10 different pieces of business software from 10 different vendors then all of my employees have 10 different user logins and 10 different passwords to maintain and remember.  This won’t fly in the enterprise. Another big problem is the question of risk and trust. “Do I trust this hosted software company to maintain and secure my data?” Do I trust 10 different vendors to each maintain my data.

I gave a presentation during Microsoft Dynamics CRM Incubation week back in mid-December and I showed this graphic:

 

Technology Evolution vs. Customer Adoption

This is not exact science.  This is really my opinion of the approximate periods where each category of computing platform reached a critical mass in terms of CUSTOMER adoption starting with the client-server days (I’m old but I was still in college when mainframes/terminals were all the rage).  I should really back this up with sound research but my goal is to illustrate a point, not publish an article in a scientific journal. 

The point is that 2009 might be the year that Cloud Platform TECHNOLOGY is a real option but that certainly does NOT mean that cloud computing will be adopted by the majority of businesses any time soon.  So, if we want to start selling our software at the end of 2009 or early 2010, should we write it for Google’s AppEngine or build it completely on Microsoft’s Azure platform?  That’s probably not a good business move considering that SMBs haven’t moved to SaaS as a predominant platform yet, much less enterprises.  We would be a lot better off building our software so that we can offer it EITHER an on-premise OR a hosted (SaaS) model.  This is why my company developed the latest version of CourseMax on the Microsoft Dynamics CRM platform.  This is the Software + Services advantage, the “Power of Choice.”

Does this mean that we shouldn’t be considering cloud computing at all?  No way.  We should always be forward thinking.  We need to be ready to offer our customers what they want when they want it which means we better start working on it before they want it and we better start thinking about it before we start working on it.  Are there pieces of Google, Microsoft, or Amazon’s cloud platform we can start incorporating into our product now?  Sure, there may be some logical pieces of our architecture that we want to implement in the cloud.  Maybe we’ll use Microsoft Azure’s Internet Service Broker to handle data synchronization.

History has shown us a pretty natural cycle of platform adoption.  The future part of my graphic may be way off.  I’m not Nostradomus you know.  Perhaps the cloud is really an enhancement of SaaS that will actually accelerate SaaS adoption.  I think that may be partially true.  But there are still many things that need to shake out in cloud computing, standards to be built, interoperability, and much more before even the technology is ready for prime time.

One thing I am sure of is that businesses will be buying on-premise software for many years to come.  We should always learn from the past and look to the future.

Tell me what you think.  What’s your opinion?  Are you building software on a cloud platform already?