The ASPs Value Proposition or Valueless Preposition? Paul Greenberg President, The 56 Group, LLC...
-
Upload
carmella-harper -
Category
Documents
-
view
214 -
download
0
Transcript of The ASPs Value Proposition or Valueless Preposition? Paul Greenberg President, The 56 Group, LLC...
The ASPs
Value Proposition or Valueless Preposition?
Paul Greenberg
President, The 56 Group, LLC
Author: CRM at the Speed of Light, 2nd Edition (McGraw-Hill 2002)
3rd Edition, May 2004
14%
69%
10%7%
1 2 3 4
What is an ASP?
1. A snake.
2. Software provider.
3. A utility company.
4. Who the heck knows?
What is an ASP?
Application Service Provider (ASP)
• More than one Variety Net Natives a.k.a On Demand Utility
Hosted Solutions
Other Permutations
• Hybrids
• Both: Online/On Premise
ASP: The Rise & Fall
The hosted solution model failed miserably in 2001 after a brief, meteoric rise• Fears about data security – some real, some
imagined
• Hosted software, not a services model
• Cost was still too high – paying for licenses and administrative fees and consulting
• Lousy marketing strategy – spent lots of money before delivering anything real at all
ASP: The Fall & Rise
New business model intersected bad economy
• Money was an object to most companies
• CRM was still on the table
Traditional CRM had hit a brick wall with its “large enterprise” problems and slow ROI
Net Natives able to swoop in with great marketing and smart value proposition
ASP: The Model
Software As Subscription
• Service oriented, multi-tenant architecture
• Regularized, flexible fee structure (monthly,
annual)
CFOs love this approach – low risk, amortized
cost, little bit upfront
ASP: The Model
On Demand Services need SOA• Service-Oriented Architecture (SOA)
Collection of business components and IT functions driven by evolving business reqs
Web services (XML, SOAP, WDSL, etc.)
• .NET or J2EE compliant platforms Vendors vary (Netsuite J2EE; Salesnet .NET)
ASP: The Value Proposition
The Upside - CFO
• Much lower TCO than traditional vendors
Approximately 20% of traditional
• Pricing model is subscription fees
Per user per month
Can be flexible
Easy to plan for
• Cost overruns not an issue
ASP: The Value Proposition
The Upside – CIO/CTO• No downtime during upgrades
• IT personnel overhead outsourced to ASP – significant reduction of administration time
• Much shorter deployment times 30 days is not at all unusual Compare to 4 to 18 months for traditional CRM
• Customization is now configuration, though custom applications can be built w/provided tools
ASP: The Value Proposition
The Upside – VP of Sales (or Marketing)
• Salespeople able to work offline,
online or mobile – always up to date
• Adoption rates high due to easy to use
interfaces
ASP: The Value Proposition
The Downside
• ASP claims are often excessive While benefits great, just not as great
ASP: The Value Proposition
The Downside
• Don’t provide strategic services Change management
Value creation services
Other performance related benefits
Are a system and a technology, not a
strategy and a philosophy – missing those
pieces
ASP: The Value Proposition
The Downside
• Competitive beyond Reason Always sending out press releases on which
client they’ve stolen from whom
Some will make unfounded claims about
their competitors that under scrutiny aren’t
true
ASP: The Myths
Security Myth
• “My data is not secure, because I don’t have it”
Mythbuster
• ASPs have multiple levels of security Physical
Internet
Network
Operating System
Application Level
ASP: The Myths
Integration Myth
• “Its impossible to integrate because the
hosted services don’t integrate well with our
on-premise systems”
Mythbuster
• Use of web services makes integration less a
chore, though issues will be there APIs, service oriented architectures
ASP: The Myths
Functionality Myth
• “The ASPs might be cool, but they don’t have
anywhere near the functionality we want”
Mythbuster
• The net natives and hosted services provide
all the functionality you need
• Not in all circumstances (manufacturing
environments, etc.)
ASP: The Market
Growing Rapidly – Here to Stay
• Aberdeen - $8.0 billion by 2007 28% CAGR
• IDC – 65% interest in using “on demand utility”
• Gartner Group – “in 2004, there will be increased acceptance of the hosted model for sales automation for all enterprise sizes, with an understanding of its limitations”
ASP: Who are Those Guys?
Salesforce.com
• 8,400 customers, 120,000 users
• One of two vendors providing end-to-end
“value chain” services
• Put “software as services” model on the map On Demand Utility
• Major force in changing CRM paradigm
ASP: ASP: Who are Those Guys?
Netsuite
• Over 7,000 customers
• The other end-to-end value chain provider Even include modest Partner Relationship
Management capabilities – uniquely
• The only net native that is an Oracle-focused alternative
ASP: ASP: Who are Those Guys?
Salesnet
• Easily the deepest sales functionality of all the
net natives
• First net native to understand the process-
driven transformation of CRM
• Uses business analysts to work with you to
configure or customize Salesnet to your needs
ASP: ASP: Who are Those Guys?
RightNow
• Deepest customer service functionality
• 20 straight quarters of profitability
• Unique selective upgrade capability
ASP: ASP: Who are Those Guys?
Siebel CRM OnDemand
• Alliance with IBM OnDemand services
• Aimed at mid-sized companies
• Siebel did a 180° wheelie on hosted market
after initial failure
Siebel CRM OnDemand: Upshot Edition
• Siebel acquired Upshot in 2003
• Aimed at smaller business users within Siebel
world
ASP: The Other Players
Hosted Solutions – Conservative Cousins
• Corio, USInternetworking, Surebridge• Surebridge has best value proposition with
hosted version of MSCRM 1.2
• Represents 40% of their revenue even
though MSCRM out only a year
ASP: Protect Yourself
The Service Level Agreement (SLA)
• Must be tightly binding and detailed
• Consider Scope of services Performance benchmarks Time to problem resolution Security Uptime guarantees Credits for great performance, penalties for poor
performance So much more