Pretzel Logic – Enterprise 2.0

Tom Davenport (who holds the President’s Chair in Information Technology and Management at Babson College, my alma mater) has a post on Harvard Business Review where he makes the case that Knowledge Management may well have been the most palatable solution to preventing Underwear Bomber security breach that look the peace and joy out of Christmas Day, 2009.

Professor Davenport concludes:

There are, of course, some remedies to this problem. One would be a really nasty police state, with a lot of false positive detentions. Another would be an international data management agency. A third would be lots more money and intrusiveness spent on airport searches, behavioral screening, etc., a la Israel and El Al. All seem somewhat unlikely.

Perhaps the only palatable remedy would be an intelligence community that views high-quality information and knowledge management as its primary job. If I were Barack Obama, that’s the approach I would be viewing as the real solution to the "connect the dots" problem.

I’d contend that, in this case, knowledge was too managed. And that’s the crux of the problem – too much general purpose management of data, silos, content artifacts. And too little context around discrete tasks that in actuality is what should have been manage -Where data, content and people would wrap around the task to solve it.

There’s plenty of analysis on how the billions spent on information sharing post 9/11 failed. The New York Times writes:

Some government officials blamed the National Counterterrorism Center, created in 2004 to foster intelligence sharing and to serve as a clearinghouse for terrorism threats, as failing to piece together information about an impending attack.

Others defended the center, saying that analysts there did not have enough information at their disposal to prompt a broad investigation into Mr. Abdulmutallab. They pointed the finger at the C.I.A., which in November compiled biographical data about Mr. Abdulmutallab — including his plans to study Islamic law in Yemen — but did not broadly share the information with other security agencies.

KM is hardly the place to start to wrestle this challenge. The problem with KM is that it’s often (not always) measured by somewhat nebulous yardsticks such as amount of shared and reusable content, amount of contribution, lowered email use and number of docs stored on the network. All of this is done in closed networks. As a result, just like we see in the enterprise and its use of Content Management Systems, the government also suffers from ‘silo-ization’, poor findability, and poor analytics.  The fact is, no amount of closed loop information sharing is enough of an air tight strategy to prevent intelligence from falling through the cracks. There’s too many systems in place to let computer based intelligence automatically throw up red flags every single time.

The solution lies in putting people at the core of this difficult problem. The Social Computing Frameworks that we use, in contrast, consider the concept of ‘closed’ to be an exception rather than the rule. This allows those responsible to take ownership of the task but other unknown “experts” get to watch the flow and participate where they can enrichen the quality of the outcome or even better, as in this case, raise a big red flag. Once clear unified objectives are set across agencies, open up the execution so that the best known and unknown minds can chime in.

Whether Social Computing or traditional KM, the larger problem is with lack of objective setting to getting the right information to the right people. It’s about setting the right objectives upfront at the highest levels and identifying which of these objectives can in fact be addressed by information management solutions and frankly, which can’t. And whether the right incentive structures are in place for individuals and groups to collaborate towards a common goal. I’m willing to bet that the strategic and execution objectives laid out by the chiefs of each agency don’t line up in a way that can practically lead to a unified collaboration and intelligence discovery execution plan.

I’m afraid the crotch bomber event will result in hundreds of millions being thrown at "information/knowledge management” solutions that centers on better sharing, transparency as a strategy in and of itself,  as opposed to as an execution path towards defined strategic goals that everyone is firmly behind.

I hope I’m wrong.

These were the most visited posts from December 1, 2008 to December 1,2009, per Google Analytics.

I just realized that this blog is only little over a year old. Feels like I’ve been writing for much longer.

A sincere thank you for reading, commenting, referencing and re-tweeting my posts. I can’t tell you how much I appreciate it and how much I’ve learned from the debates and exchanges we’ve had here and on Twitter.

Ok, back to the topic of this post. Top posts here, as follows:

Friendfeed: Inspiration for Sales Intelligence in an Enterprise 2.0 world?

This post took the top spot. It did well on its own but some of the popularity was thanks to a link in the New York Times via ReadWriteWeb.

Summary: How to approach sales performance acceleration using Enterprise 2.0 constructs and account for interaction and data preferences of the typical sales rep.

Enterprise 2.0 Software: Commoditization before Monetization

Summary: A software market perspective on where we’ve been and where the category may end up given the entry of free and open source alternatives. This post could use an update given the entry/imminent entry of Microsoft, Salesforce, TIBCO and SAP – all of whom have chosen to build and not buy.

Why Process Barfs on Social

Summary: Taking the battle to the enemies turf. This is in response to “Enterprise 2.0: What a Crock” by Dennis Howlett, addressing what I hope is a balanced view on where process pundits are wrong about Enterprise 2.0 2.0 and the value of ERP that they closely guard. As well, it shows tangible examples of where social computing has in fact accelerated performance and suggests what we in the E2.0 community can reduce this friction between process and social. Dennis comes around with his balanced opinion as well.

Don’t Confuse Enterprise 2.0 with Social Computing Concepts

Summary: An early post – one of my last on definitions and naming – a topic that I generally stay away from. This post suggests focusing Enterprise 2.0 as a state the enterprise achieves via strategic use of social computing.

Why Unlocking ECM is critical to your Enterprise 2.0 Execution Plan

Summary: How you can leverage existing ECM/CMS investments and Social Computing to drive better outcomes for your marketing investments. Also included was a conversation with Billy Cripe, then Director of ECM at Oracle.

Happy New Year. See you on the other side. I’m pumped about 2010.

This morning brings a new relationship in the Enterprise 2.0 Services arena: Hinchcliffe and Co, an enterprise ‘web 2.0’ consulting and education provider, Asuret, an enterprise risk mitigation software and services provider and Socialtext, a social software provider join forces to deliver the first stack of services and software to take organizations through planning and technical implementation of social software projects.

Together, this alliance is set up to offer requirements and technical design, the necessary project risk management levers and finally, a well respected software suite to bring it all to life. Coming out at the customer end are solutions for social collaboration, intranet redesigns, customer communities, corporate social media, Social CRM and finally Business and Industry Social Networks.

As seen in the diagram below, the overall stack of service covers includes architecture and design, technology selection and application, as well as project management.

To compliment methodology and implementation experience brought about by Hinchcliffe and Co., the Asuret software + consulting service offers project risk management methodologies and processes to identify pressure points that can derail engagements in areas of stakeholder alignment, executive sponsorship, project management, business case and the like.

The promise of this alliance centers on the reality that in many cases adoption of Enterprise 2.0 tools today is low and that most organizations are still learning the social computing ropes. Moreover, as with any large scale IT project, social computing engagements also face skepticism around the management of risk, control and trust. The group plans to bring structured methodologies, risk management tools and with Socialtext, mature social computing software package to holistically deploy social software solutions.

There’s certainly a place for such a partnership where IT is looking for strategic technology services combined with mature social technology. The IT manager has been severely burnt in the past due to lack of a comprehensive program management methodology and ineffective risk mitigation controls. Both led to more delays and consulting change orders than she would like to remember. This alliance of course has to prove that it has the execution wherewithal to get business results and reduce project risk but as far as a framework goes, it’s clear that a lot of careful thinking has gone into the design of this service set. Oh and there are some very smart folks involved here so there’s no reason to doubt their ability to pull it off.

Another thing I particularly liked is the implicit acknowledgment that social transformation doesn’t always mean throwing out incumbent process and technology whole hog, in favor of social. The answer lies within a balance of best in process-laden technology (e.g. CMS) and new open constructs. As seen in the diagram above, this partnership is designed to help customers leverage existing investments in content and knowledge management and business intelligence and fold in social computing, where applicable.

The Enterprise 2.0 services market is beginning to take shape but is still very young. At this time, the ‘E2.0′ discussions that command the airwaves are taking place primarily at 2 levels: 1) Ten thousand feet above the customers head and 2) deep down in the trenches around tactical tool selection and post deployment adoption. Both important in their own right. However, there’s plenty of room between these two for alternate value propositions. This alliance serves as a credible option for many of those projects in the middle, especially ones that are spearheaded by the IT department.

I’m personally excited to see this alliance enter the ‘Enterprise 2.0’ services space. We can’t have a market without a marketplace so the more credible service providers that surface, the better for customers and the ecosystem in general. Congrats to all involved.

Here’s the official statement and some good write ups by CRM champs Paul Greenberg and Esteban Kolsky.

Disclaimer: Dion Hinchcliffe and I both serve on the advisory board of the Enterprise 2.0 conference.

A significant portion of my work over the last decade (both as part of the marchFIRST/ Mitchell Madison team and later, my own practice) has been in the area of accelerating performance for business partner networks at large organizations.

As is always the case, one of the outcomes of this economic downturn is going to be massive M&A activity and industry restructuring. Just in the last week, we saw Dell and Perot Systems, and now Xerox and ACS tying the knot. My own experience with this was my consulting work during McKesson + HBOC, Sun + StorageTek mergers and recently, a $1B+ communications service provider entering the SMB market via acquisition, amongst others.

The Effect on Traditional Partnerships

One of the most prominent pressure points in the midst of such consolidation is the partner ecosystem. New partners get added, existing partners face conflicts of interest and a sudden expertise/knowhow gap vis a vie the new combined offering. In the case of the channel in particular, the end customer (really the partners customer) looks to the partner for clarity on the manufacturing organizations new standing in the market.

Add to this some of the timeless struggles in this ecosystem that are prevalent in any economy. As a manufacturer of physical or soft goods (say Insurance), you’re always trying to attract the top 20% of your channels sales reps as a way to get the largest share of wallet of that partner. But so are your competitors. So the onus is on you to make it dead simple for your channel to understand and communicate the benefits of your products to the end customer. As important, the ease of doing business with you (which includes partner on-boarding, provisioning, co-marketing, white labeling, first line of support etc) is a big factor for channel sales reps that are going to represent you in the market. I’ve even seen first hand in the SMB channel for large organizations that partners will even give up as much as 10% of margin in exchange for low frictional end customer management and ongoing administration. The difference is more than made up by freed up time to drive up sales volume. All up, simplicity of doing business is paramount.

Organizations are But a Matrix of Internal Partnerships Too

Then there’s another side to this: My work experience has proven that organizations that do well understand that even internally they are really orchestrating a matrix of complex partnerships. Sales with Marketing; Product Development with Marketing, R&D with engineering etc., where each of these tend to work in extremely different ways. To be successful, you need to understand the unique dynamics of this relationship that make for a solid partnership that can ultimately drive the business forward. Outside of internal team collaboration (say, a group of marketers, a group of engineers, etc.), no spray & pray / general purpose employee collaborative strategy (or tool application) is going to really show sustainable impact for every tribe or collective. And just like traditional business ecosystem partnerships (customers, suppliers, channel), these internal partnerships also get significantly rattled in the face of industry consolidation.

Critical Considerations for Social Computing

In principle, social computing constructs afford a significant opportunity to first bring back normalcy to these partnerships at a rapid pace and then accelerate performance well beyond the original baseline – by driving simplicity. Basic constructs such as people and data findability and crossing siloed org designs are important first steps. And these can be made possible with a deliberate strategy and today’s “e2.0’ tools.

Its critical to note though, that these efforts alone likely won’t account for context, incentive and performance driven collaboration preferences – elements that generate tangible business value and participation. And so the true promise from social computing constructs and investment to cultivate these partnerships will be eventually be questioned if the following are not dealt with, head on:

• First, existing structural inefficiencies in how internal or external partners liaise as a result of little adherence to basic human interaction constructs and incentive structures, and unnecessary process centric technology that restricts human capital flow. Examples: Restrictive ECM processes that bring massive risk to business execution or latency and artificial walls in the communication process with supply partners that result in massive lost opportunity to recast the concept of collaboration across the extended business ecosystem.
• Second, neglect of critical early programmatic design considerations that truly accelerate performance via social computing or ‘Enterprise 2.0’ concepts. The results of this will manifest itself during the hangover period following pre-mature/euphoric technology-led change initiation in the enterprise. Examples of “fall outs” will be misconstrued outcomes from Attention optimization (see v. good post by Jevon MacDonald on this), a rudderless rush towards the ‘real time enterprise’ vs. ‘right time’ considerations, mis-alignment between strategy and ‘enterprise 2.0’ deployments. Or the side effects of heightened transparency as a result of open knowledge models (As Oliver Marks eloquently opines).

The business case of socially networked business ecosystems must include solutions and antidotes to these two fundamental issues to gain long term value – whether that’s competitive advantage, cost savings or revenue enhancement. Smart line of business executives will demand it upfront, catch on early post kick off or worse, just ignore the initiative whole hog. They are acutely aware of the failed promise of portals and extranets as the one size fits partnership facilitation solutions to large scale ecosystem integration. So this time around they will want to be convinced that you can bring simplicity, contextual interaction, design around standard performance metrics – yet shield participants from the needed complex technology that’s behind the scenes.

Got Tech?

One thing’s for sure: The socially powered business partner ecosystem will not emerge from what we know of to be the ‘Enterprise 2.0’ technology stack, as it stands today. No doubt that the current tools will play a significant role towards simplifying these relationships. But to accelerate business performance via social computing constructs, lots of design work is needed along with the filling of critical technology gaps to truly account for context, cognizance of both process and social at the business activity level, and a deep understanding of and response to individual incentive that makes participation a natural instinct.

At the Enterprise 2.0 conference in San Francisco, Oliver Marks and I will be running a new track called “Selling the Business Case for Accelerating Business Performance with Enterprise Collaboration and 2.0 Technologies”. Via a combination of instructional and practitioner panel discussions, we’re going to tackle how known functions in the organization such as Customer Support, Purpose Driven Employee Collaboration and Supplier Networks can leverage social computing constructs to accelerate performance. There’s a need for a unified social fabric across business ecosystems, yet a deliberate focus on the unique motivations for each business interaction is vital. We aim to bring it all together at the conference. More details about the track from Oliver and from E2.0 Conference Chair, Steve Wylie.

If you’re a large organization using enterprise content management systems (ECM), chances are that its powering images, documents and records management, and web content. These systems enforce roles, workflows, access control and versioning to enable the creation, management and dissemination of media assets.

What this means is that from the very beginning of a given business activity, a few people control the creation of information that employees, customers, partners and suppliers rely on to move your business forward. Like it or not, this puts the responsibility/power to influence business performance in the hands of a few, with little input from other unknown experts, or consumers of this data. You only find out how effective the content turned out to be once its consumed (and long after you can optimize).

I’ve spent a decade working with business units at large organizations designing global communication and collaborative initiatives in the areas of sales and marketing, employee comms, channel collaboration and brand management. But I wanted an outside perspective. So i reached out to Billy Cripe, co-author of Reshaping your Business with Web 2.0 and Director of Product Management in Oracle’s Enterprise Content Management Group. An Enterprise 2.0 advocate himself, Billy brings a unique perspective given that he focuses on understanding how social computing blends with existing enterprise content management – something that many medium to large organizations are going to have to deal with if they buy into the design and promise of Enterprise 2.0. All control is not good but all social is certainly not always optimal. That’s an important part of any E2.0 execution plan.

Achieving a state of Enterprise 2.0 requires surgically moving the nucleus of a business activity from process driven systems to people centric environments. I asked Billy to identify 3 inefficiencies in traditional content management processes that impede business performance, where social computing can help:

Wrapping the best brains around the problem

Billy and I also talked about how Enterprise 2.0 enabled organizations will blend social computing and structured process by turning siloed unstructured content into ‘social objects’ early on in the process. For instance, instead of using traditional access control-heavy CMS workflow when working on early drafts of marketing collateral for a product launch, or market projections for a new line of business, a wiki – style environment opens up discussions around early drafts to more constituencies before the owner moves this into formal production. Social networking features enable you do discover ‘experts’ and invite them to contribute. Micro blogging concepts make your business activity noticeable across the organization so others can be aware of where they can help. In addition to refining the end product, think of the risk you can mitigate by having the right voices pipe in, early on. Examples of early collaboration include:

• Early feedback on product specs from loyal customers before you lock feature sets.
• Deeper understanding of product strengths from supply chain partners that intimately know the power of each component in your product.
• Feedback from channel partners that might be critical to meaningful distribution and adoption, post launch.
• Getting previously unknown subject matter experts in distributed organizations to provide insight on an RFP response.
• Leveraging the signals: A contact center rep gets to peer into community content or find experts to support sometimes bland one-dimensional answers coming from the knowledge base or ERP system.

When you layer in social computing concepts at the early stages of content creation, you have the ability to encourage such uses of raw ingredients (or social objects). These social objects, previously hidden in an access controlled CMS environment are now unlocked via social computing concepts and tools. The beauty is that they can now be work in progress for some, finished product for others that participate or discover it, or can be interpreted in totally different ways, never intended by the original participants.

Does Your Content have legs?

Analytics gained via social computing architectures fold in accountability and measurement at the social object level as well as the meta-data (rankings, ratings, tags etc) on each content type. This enables you to learn if/how content is being used to truly accelerate business performance. What types of content are highly rated or most re-used, what business activity was most impacted by specific social objects? The business of creating and managing content (and budget) is often a “black hole” at large organizations. Social computing analytics let you measure the value of each building block (and the programs that create them) so you know which horse(s) to back, going forward.

Important Execution Elements to Consider

In no way do I want to imply that just throwing in a social suite will make this work model a reality. It won’t. A couple of important considerations:

• This is not about a more effective content management process. Its got to do with strategically using social concepts to change how your organization collectively creates, vets and leverages content.
• Design processes and select applications that can accelerate business activity. If you start with “I need a new content management strategy”, you’re likely off to a wrong start. If your thinking about say how to improve sales close rates by better alignment between sales and marketing content, you’re approaching the problem correctly.
• Make participation available but surgically enforce controls where needed.
• To ensure adoption and mitigate risk, check whether you’ve answered the “what’s in it for me” question before you expect partners, employees, organizational departments or customers to jump in and play.
• Vendors may call their offerings platforms, solutions, whatever. At the end of the day these are tools. Lead with the inherent business performance goals that should govern any potential Enterprise 2.0 organizational design and work backwards to figure out the right platform or best of breed solutions architecture.

Vendors Moves

ECM technology offerings are going to morph at a phenomenal rate over the next 6 months. Some will bring social computing to ECM. Others will wrap Social Computing and ECM around ERP. Oracle is making very commendable moves by fusing its ECM, Portal and Social Offerings. OpenText is also going back to the drawing board (interview by Cheryl McKinnon) on what content management means in the socially connected enterprise. And Acquia is bringing an industrial strength offering to businesses, based on its hugely successful Drupal open source CMS offering. More on OpenText and Acquia in subsequent posts.

I’d like to close with a special thanks to Billy for taking the time to chat.  He was very careful to disclaim that his lens might be slanted towards incumbent content management processes.  In fact that’s exactly what I was looking for, so we could provide value to thousands of large organizations that have heavily invested in some formal content management process.

Google announced its intent to get into the Operating System business with the upcoming release of Google Chrome in 2010. You can get a sense of all the premature gushing on Techmeme – journalists and bloggers one upping each other on when (not if) Google will each Microsoft’s lunch. The blog title award goes to TechCrunch: “Google Drops a Nuclear Bomb on Microsoft…”

Before we get into Enterprise 2.0 ramifications, lets get Enterprise 1.0 out of the way….

Chrome OS’ allegiance to the Netbook as a distribution platform is snooze-provoking in the context of the enterprise.  As Dennis Howlett on ZDnet opines:

Even then and despite the proclivity among geeks for all things OS, when ChromeOS does emerge it will be a v1.0. No enterprise buyer I know will go within a country mile of committing its users’ kit to something at that level of maturity. Can you imagine the chaotic disruption this would cause in IT departments used to burning images and distributing a standard desktop?

Beyond this, broadband proliferation is the single biggest issue even if the IT department does come around to the idea of cloud based storage. Stacy Higginbotham at GigaOM puts forth a realistic question:

Can Google convince carriers, which aren’t big fans of the search giant, that selling netbooks with Chrome OS is the way to go? Most analysts expect carriers to become a huge distribution channel for netbooks.

If your data is in the cloud, accessibility needs to be 100%. And Netbook implies, pick up and go. That means rely on tethering your phone or ponying up the cash for wireless cards. For everyone. That’s already expensive for Sales reps, let the whole organization.

David Coursey of Linux World provides some great we’ve-seen-this-movie-before analysis by illustrating some painful lessons learned from when Linux tried to take on MS in the Netbook wars, and lost.

The Netbook is really Google’s attempt to find new advertising revenue sources and users, allowing it to mine all consumer data that it will store in its own cloud. Also, as Sridhar from Zoho opines, its a great value proposition for places like India where PC penetration is ~10%.

On to Enterprise 2.0

Assume I’m totally wrong and Netbooks are all the rage in the enterprise. Here’s one scenario that plays out:

Google packages up a Netbook  with ChromeOS, Google Apps, Umbrella Analytics, Google Gears and and Wave-enabled Enterprise 2.0 capabilities. The full enchilada along with a developer platform to enable customization for specific use cases in the enterprise. Now that’s a software distribution model that in theory can give SharePoint bundled with Exchange, a serious run for its money. And that also speeds up commoditization of Enterprise 2.0 solutions.

But its all very unlikely for the foreseeable future.

First, given that ChromeOS doesn’t come out until 2010 and that IT departments are not going to throw out existing MS software and their laptops the next morning, Microsoft has plenty of time to counter.

Second, the true promise of an Enterprise 2.0 design will not materialize if your social software is not cognizant of /doesn’t enrichen what’s going on in your ERP, CRM and ECM-enabled business activities. So unless you’re comfortable with the farfetched assumption that all your other non Google powered business applications will also live in the cloud reliably, and will magically talk to each other, this is a non-starter. Oliver Marks has some other excellent comments on the impractically of this working out in the enterprise that are worth a read.

In some ways, Microsoft commanding the OS over Google may just be a gift for Enterprise 2.0 upstarts.  As theoretical as the scenarios is that I’ve laid out above, it’s a pretty compelling blueprint for Google to work towards.

However, lets face it, a comprehensive silo breaking Enterprise 2.0 design is years away for most organizations, let alone one that’s powered by a 100% cloud solution. So in the meantime, Microsoft’s platform offering leaves room for others to provide more visually appealing, context aware social overlays to SharePoint. Something that Enterprise 2.0 providers such as Newsgator and Telligent have become very good at building upon. Even non .NET solutions such as SocialText have strong hooks into SharePoint.

Any more discussion on this topic right now is like asking a jury to call a case before hearing the defendant. Lets see what the complete picture looks like when Microsoft shows its’ hand next week.

This is the second of a series of posts on my take aways from the Enterprise 2.0 conference in Boston.

My customers and I debate the applicability of SaaS to their operation on a regular basis, using garden variety criteria such as process alignment, cost, ease, integration, security and the like.

A new dynamic hit me after chatting with multiple SaaS providers at the E2.0 conference:

A good number of E2.0 SaaS solutions unfortunately had little to do with the customer. The decision to go SaaS was largely an inward convenience.

The SaaS Foundation

During 2007-2008, many Venture Capitalists bet on the model that Salesforce has proven out, hoping to emulate it in the E2.0 category. Compared to traditional on premise software, SaaS organizations proposed a reduced operational capital outlay thanks to write once, publish everywhere code, low or no-touch sales via online purchase & provisioning, and flattened marketing costs via free-mium models & platform ecosystem distribution (e.g. AppExchange). And so we see this foundation in many E2.0 providers today.

Enterprise 2.0 Market Reality

Now, superimpose this SaaS operational design on some of the current realities in the Enterprise 2.0 space. Note: I’m talking about larger customers.

• Not one vendor with whom I spoke, on-premise or SaaS, was ready to declare wide scale adoption. It’s tough stuff. And it’s clear that it requires expensive headcount to effectively drive awareness and usage, post deployment.
• Annuity pricing seems to be most palatable for the buyer whether its SaaS or On Premise. So if adoption/applicability starts to wane, don’t expect a check next year.
• Integration is not optional. Whether light weight directory integration or deep application level integration, it’s become the price of entry.
• Integration is not enough. You’re still risking contributing to a silo’d organization and that runs counter to the principles of collaborative environments that E2.0 promises. Unless greenfield, what’s needed is deep association with incumbent ERP /ECM driven activity.
• The most striking lesson from last week’s shocking demise of on-demand BI vendor LucidEra (Hat Tip: Dave Rosenberg | cnet) is this: Customers do not necessarily want simple solutions – in fact, they often need ridiculously complex, often personalized systems to effectively drive business acceleration. What they’re really asking for is simplified experiences that mask them from behind-the-scenes voodoo. Many SaaS vendors seemed to confuse these two distinct requirements.

Salesforce had 2 significantly distinct characteristics going for it that led to critical mass. An individual could drop a credit card and start using the service. Enterprise 2.0 on the other hand is predicated on network effects. Second, Salesforce is used as a standalone application in many use cases. But true Enterprise 2.0 enabled transformation without cognizance of other applications? Not very effective for many organizations.

Now, is all of this pertinent only to E2.0 SaaS providers? Nope. On premise providers need to deal with the realities stated above as well. However, from a organizational design perspective, SaaS only offerings are financed and built to do business with very few marketing, consulting and sales resources and with a one size fits all offering.

On-premise solutions on the other hand are funded like old school enterprise software companies and their financials account for head count to be successful. And so, whist they are also facing tight budgets in this economic climate, they may still be better suited to offer internal integration and adoption services. Or a financially attractive VAR/SI offering.

Product Development Motivators

I couldn’t shake off the nagging feeling that many newer SaaS vendors were more excited about the ease of SaaS being a way to reduce their own acid reflux problems. Sure, agile, iterative development is good for the customer as well. But these benefits need to be weighed against the goal of creating silo busting, well adopted, real time enterprises for customers. And that requires labor intensive adoption and clever integration assistance.

Many SaaS vendors (focused on all market segments) also seemed to be clearly seduced by the ease of integration with other cloud solutions, void of relevance to the target customers incumbent technology footprint. Google Apps before SharePoint. Wikis over ECM. More Salesforce, little to no SAP/Oracle. Again, convenient for the provider, not always relevant to a lot of customers.

Closing Thoughts

I’m in no way asserting that SaaS is a bad idea across the board. I absolutely believe that there is a model somewhere out there for cloud and SaaS offerings for large customers, despite recent high profile hiccups from Amazon and Google.

However, SaaS is not an optimal solution for every business problem and every customer. Providers need to look in the mirror and be brutally honest with themselves about the motivations around their SaaS strategy and its relevancy to the customer. I’ve already heard of instances of business changing hands between E2.0 vendors at this early stage in the game, for these very reasons.

Having had led over scores of sizable strategy and technology sourcing engagements, there’s no debate in my mind about one thing: In a bake off, a vendors true motivations become very transparent to smart executives involved in the selection process. Once you get past emergent Enterprise 2.0 embracing and it’s time for the big leagues, this stuff matters.

Bernard Lunn at ReadWriteWeb writes an excellent post (link below), asking “Why Enterprises Don’t like SaaS”. I think it’s because subconsciously Enterprises sense that SaaS purveyors are saving all the fun for themselves.  -)

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