Todd Bishop reported today of Microsoft's intended entrance next year into the B2B SaaS market with its announcement at the annual Worldwide Partner Conference in Denver, providing details on pricing and partner revenue-share plans for a hosted service version of Microsoft Dynamics Live CRM:
"Businesses use CRM programs to handle sales, service and other customer interactions. The new "Live" CRM option, to be offered by Microsoft as an online service, is part of its broader effort to expand beyond traditional software licensing into subscription- and advertising-based offerings. ...Microsoft announced plans for a subscription rate of $44 per user each month for the professional version of the new Microsoft Dynamics Live CRM, and $59 for the enterprise version. Salesforce.com lists prices of $65 for the professional version of its Web-based customer relationship management service, and $125 for the enterprise version. List prices in the online CRM market are commonly in the ballpark of $70 to $100 per user each month, said Liz Herbert, a Forrester Research analyst. "
Phil Wainewright commented on the catching up Microsoft needs to do in this SaaS / CRM space (something I've commented on previously), hence the lower price-point when compared to Salesforce.
"Undercutting Salesforce.com is an obvious ploy for Microsoft to attempt with its CRM Live product, so the pricing it announced today shouldn’t come as any big surprise. Salesforce.com has always priced at the high end of what it could get away with, and it’s benefitted from five years of being allowed to get away with it, plowing the proceeds into an astonishing sales and marketing drive that’s blasted revenues past the half-billion dollar a year mark."
(screenshots here)
Although Microsoft will be offering Dynamics Live CRM at no charge during an early access beta starting this year, it is unlikely they will go "live" until the second half of 2008 (I'm speculating), presumably once the "Windows Live Data Centres" are ready to do so...a brand we are promised we'll hear a lot more of in the future.
Salesforce.com responded. In a phone call with Todd Bishop, VP of Corporate Strategy, Bruce Francis, took a typically aggressive tone (that is, typical of Salesforce.com, not Bruce) in reacting to the news:
"What it looks like is that Microsoft is just marking down an inferior product to what customers are actually paying right now. Also, one thing that I haven't seen is the url where I can sign up for a 30-day trial. ... I know a great multi-tenant on-demand service when I see one, and I see more of them every day. ... We could talk for hours about all the great on-demand services that are out there that I can sign up and use. Where is Microsoft? Microsoft has a price list, not a product."
But where is the news of Dynamics Live CRM web / SaaS APIs? No mention of these anywhere that I've seen, but if Microsoft wants to take on Salesforce.com they'll need a strong story here - the latter has a mature programmable surface today with a fairly healthy ecosystem of developers.
It's one thing to have on-premises software that can be extended and integrated with other software and services through SOAP APIs behind your firewall (Dynamics has a healthy story in this department today), but it is quite another (increasingly necessary) thing to provide APIs as part of a hosted SaaS service. I would have thought the provisioning of SaaS APIs would have been a central component of Microsoft's messaging today so am a little surprised by its omission.
(Courtesy - alexbarnett.net)
Sunday, December 30, 2007
Thursday, December 27, 2007
SOFTWARE INC NOW GETS A ROYAL POUND-INGC
By Chitti Pantulu, HyderabadDNA
While attention has been focused on the impact of a strong rupee vis-Ã -vis the greenback, going into the third quarter earnings season, the sudden and steep weakening of the British pound is set to emerge as a new concern for the Indian IT industry. Till September-end, the rupee strengthened almost 11% against the dollar but only 6% against the pound. But since early October, it has shored up a further 4% while holding steady against the dollar.
The weakening of the pound comes at a time when Indian IT vendors are grappling with strategies to derisk against the dollar by invoicing in euro and pound. But the sudden spurt in the rupee against the pound complicates this exercise. This could hit the quarterly results differently, CLSA analysts Bhavtosh Vajpayee and Nimish Joshi pointed out in a insightful report on Wednesday.
The hardest hit could be Tech Mahindra, which has 72% of its invoices denominated in the British currency, and Mastek, with 65%. Among the large caps, HCL Tech has 25% exposure to the pound, followed by TCS at about 16%. Satyam has the lowest exposure to the pound, at 9%. “We have a strong hedging position of $2.6 billion against a basket of currencies which is dynamically monitored and adjusted by a 10-man strong treasury department,” said a TCS spokesperson.
While attention has been focused on the impact of a strong rupee vis-Ã -vis the greenback, going into the third quarter earnings season, the sudden and steep weakening of the British pound is set to emerge as a new concern for the Indian IT industry. Till September-end, the rupee strengthened almost 11% against the dollar but only 6% against the pound. But since early October, it has shored up a further 4% while holding steady against the dollar.
The weakening of the pound comes at a time when Indian IT vendors are grappling with strategies to derisk against the dollar by invoicing in euro and pound. But the sudden spurt in the rupee against the pound complicates this exercise. This could hit the quarterly results differently, CLSA analysts Bhavtosh Vajpayee and Nimish Joshi pointed out in a insightful report on Wednesday.
The hardest hit could be Tech Mahindra, which has 72% of its invoices denominated in the British currency, and Mastek, with 65%. Among the large caps, HCL Tech has 25% exposure to the pound, followed by TCS at about 16%. Satyam has the lowest exposure to the pound, at 9%. “We have a strong hedging position of $2.6 billion against a basket of currencies which is dynamically monitored and adjusted by a 10-man strong treasury department,” said a TCS spokesperson.
Wednesday, December 26, 2007
INDIAN IT FIRMS HOPE TO HOLD PRICE LEVELS STEADY, UNLIKE 2001
By Vishwanath Kulkarni, BangaloreMint
Indian software vendors such as Infosys Technologies Ltd, Wipro Ltd and MindTree Consulting Ltd say they expect to maintain prices for customers in the US, the largest market for IT services, where a potential economic slowdown looms large. These vendors say they are more mature now than during the 2001 meltdown, when firms lowered prices to retain or win customers. Also, they expect to turn more aggressive in acquiring skills and assets, which may come cheap when, and if, the slowdown unfolds. “We would like to be more cautious with our pricing strategy this time,” says K.R. Lakshminarayana, chief financial officer of Wipro Technologies. So far this year, neither Indian IT vendors nor their US customers have admitted to any slowdown.
Uncertainty, however, looms large and it is widely perceived that pricing could come under pressure as 2008 IT budgets are expected to stay flat. Forrester Research last week declared that IT spending in the US next year would only grow by 5% compared with 8% it had forecast. A clearer picture is expected to emerge over the next two to three months. During the 2001 slowdown, Indian vendors, under pressure to sustain growth, experienced a steep fall in prices as customers used the situation to negotiate hard. “Hopefully, as an industry, we will not fall prey to the pricing pressure,” Lakshminarayana said. “We don’t want to lock ourselves into bad contracts with customers this time.” Typically, slowdowns have lasted for a few quarters, but “the rebound is in the form of huge volume growth.
During good times, prices went up by 3-4% per annum, but we saw a decline of 10-12% in 2001. Volume is easier thing to catch up than price,” adds Lakshminarayana. In a bid to sustain its growth, Wipro has been focusing on verticals and geographies that were less immune to a slowdown such as the non-financial services sector in Europe and manufacturing sector in the US. Sabyasachi Satyaprasad, director-research at neoIT, an offshore advisory firm, said he also didn’t foresee a steep price cut like the one witnessed in 2001. This is primarily because the industry has seen a sequential price increase over the past five to six quarters. The 3-9% year-on-year price increase is not sustainable. “Pricing may stay flat, while pressures for reduction could mount,” he said.
Indian software vendors such as Infosys Technologies Ltd, Wipro Ltd and MindTree Consulting Ltd say they expect to maintain prices for customers in the US, the largest market for IT services, where a potential economic slowdown looms large. These vendors say they are more mature now than during the 2001 meltdown, when firms lowered prices to retain or win customers. Also, they expect to turn more aggressive in acquiring skills and assets, which may come cheap when, and if, the slowdown unfolds. “We would like to be more cautious with our pricing strategy this time,” says K.R. Lakshminarayana, chief financial officer of Wipro Technologies. So far this year, neither Indian IT vendors nor their US customers have admitted to any slowdown.
Uncertainty, however, looms large and it is widely perceived that pricing could come under pressure as 2008 IT budgets are expected to stay flat. Forrester Research last week declared that IT spending in the US next year would only grow by 5% compared with 8% it had forecast. A clearer picture is expected to emerge over the next two to three months. During the 2001 slowdown, Indian vendors, under pressure to sustain growth, experienced a steep fall in prices as customers used the situation to negotiate hard. “Hopefully, as an industry, we will not fall prey to the pricing pressure,” Lakshminarayana said. “We don’t want to lock ourselves into bad contracts with customers this time.” Typically, slowdowns have lasted for a few quarters, but “the rebound is in the form of huge volume growth.
During good times, prices went up by 3-4% per annum, but we saw a decline of 10-12% in 2001. Volume is easier thing to catch up than price,” adds Lakshminarayana. In a bid to sustain its growth, Wipro has been focusing on verticals and geographies that were less immune to a slowdown such as the non-financial services sector in Europe and manufacturing sector in the US. Sabyasachi Satyaprasad, director-research at neoIT, an offshore advisory firm, said he also didn’t foresee a steep price cut like the one witnessed in 2001. This is primarily because the industry has seen a sequential price increase over the past five to six quarters. The 3-9% year-on-year price increase is not sustainable. “Pricing may stay flat, while pressures for reduction could mount,” he said.
INDIA'S SOFTWARE EDGES
By N ZindalThe Economic Times
The Indian software export industry has transformed into a mature, internationally competitive one. The quality of human resources combined with an extremely sophisticated vendor base, world class delivery model, improvements in local infrastructure, cost advantage and supportive government policies have put it ahead of other destinations. The export revenue earned by the sector has grown 300 fold in 15 years from $100 million in 1991-92 to $32 billion in 2006–07. India now accounts for about 65% of global market in offshore IT and about 46% in offshore ITES market. The growth of this sector has led to tremendous pay-offs in terms of high quality employment generation, wealth creation, transforming the image of India to one of the engines of the world economy and India emerging as a high-tech manufacturing, R&D and knowledge hub. The software export sector currently accounts for over 20% of the country’s exports and about 4% of the country’s GNP. The sector is providing direct employment to about 1.3 million IT and ITES professionals. Every direct job in this sector leads to generation of three times indirect and induced employment. Over 95% of software exports are currently from seven metros — Bangalore, Chennai, Hyderabad, Mumbai, Pune, Kolkata and Delhi NCR. Exports from software SMEs (turnover up to $25 million) have grown substantially over the last few years. During 2006-07, about 5,000 SME units exported 40% of total software exports and employed about 68% of the total IT workforce. Tier II/III cities are the key to keep infrastructural, wage and other operational costs low and remain competitive. Much of the requisite infrastructure is in place and all new units/expansion should now come up at these locations. Scale is the key for low-end IT services/BPO work. Some large units have acquired the scale and are reaping the benefits. Many large units started as SMEs. Apart from favourable market environment, innovation has been the key in their spectacular growth. The government should help much more to promote innovation through policy support and facilitation in terms of capital and working capital financing, incubation support, venture capital and seed/ angel funding, R&D funding and friendly government funded/assisted patent filing etc. The average software export revenue per IT professional is still very low and unless, we quickly move up the value chain, India would face formidable competition at the lower end of value chain.
3 Cs for growth: Character,competence,commitment
SUCCESS stems, in part, from the values, wants and needs that are interwoven within individuals and an organisation, and the ways in which the individuals and the organisations resolve the many differences and conflicts that are an ongoing part of every organisation in these diverse pursuits. Of course, one must be able to attract and retain the “best and brightest” people into an organisation in order to succeed. But, this is just the beginning.
Purposes, missions and goals that stimulate and encourage people and organisations too are essential. Within each of these areas, there are differences and conflicts. For example, just in the issue of goals with a group, there are at least four areas of potential conflict:
• The personal goals of the individual within the group,
• The goals of the individual for the group and its goals,
• The goals of the group itself within the corporation, and
• The goals of the group for the corporation and its goals.
Moreover, none of these goals are static — rather, they are quite dynamic. So, they must be continually monitored, modified and mobilised. One need only mention these four different possibilities, and various imagining of differences and conflicts can be quickly conjured into almost anyone’s imagination. If these potential conflicts are not successfully managed or harmonised into a proper and productive alignment, dissonance almost always develops. With dissonance, the energy of an organisation dissipates, while the power of synergy is reduced. Needless to say, these are difficult challenges.
Moreover, because of the dynamism involved among human beings, organisations and markets, these problems are never permanently solved. CORE VALUES WHAT core value traits can help organisations to optimise the most useful yield of their “best and brightest”? Experience has consistently taught and surfaced three traits — over and over, year after year:
• Character,
• Competence, and
• Commitment
It requires character to act on our beliefs, competence to achieve goals, and commitment to see them through. These core values drive productivity resulting in profitability and sustainability for the benefit of Cincom and our customers.
How best to describe them?
CHARACTER • Ethical integrity and fundamental spirituality, • An emphasis on seeking solutions, not casting blame, • An open environment where honest communications are encouraged and honest differences of opinion are allowed, and • A commitment to managing on the basis of sound principles. Doing the “right thing” in a professional manner is a demand we make of ourselves.
COMPETENCE • An entrepreneurial spirit that relentlessly seeks to innovate within bureaucratic structures, • Creativity, • Decisiveness, • Initiative for self-growth, • Leadership, • A continuous seeking of the optimal balance between flexibility and control, and • A disciplined organisation that continues to learn and applies methods to achieve goals.
COMMITMENT • Commitment to one’s group, the company and to one’s fellow citizens, • Missionary zeal in representing the company and its products, • Sense of responsibility and personal empowerment, • Encouraging people to grow and empowering them to do so, and • Our promise to do what has been asked and our pledge to provide whatever assistance that is required to meet our shared commitment. To be successful, persons and organisations must act with character, competence and commitment in a harmoniously orchestrated environment that energises all and synergises everything. As an employee or employer, these core value traits are essential minimums.
The author is CEO of Cincom Systems - Mr. Tom Nies
Purposes, missions and goals that stimulate and encourage people and organisations too are essential. Within each of these areas, there are differences and conflicts. For example, just in the issue of goals with a group, there are at least four areas of potential conflict:
• The personal goals of the individual within the group,
• The goals of the individual for the group and its goals,
• The goals of the group itself within the corporation, and
• The goals of the group for the corporation and its goals.
Moreover, none of these goals are static — rather, they are quite dynamic. So, they must be continually monitored, modified and mobilised. One need only mention these four different possibilities, and various imagining of differences and conflicts can be quickly conjured into almost anyone’s imagination. If these potential conflicts are not successfully managed or harmonised into a proper and productive alignment, dissonance almost always develops. With dissonance, the energy of an organisation dissipates, while the power of synergy is reduced. Needless to say, these are difficult challenges.
Moreover, because of the dynamism involved among human beings, organisations and markets, these problems are never permanently solved. CORE VALUES WHAT core value traits can help organisations to optimise the most useful yield of their “best and brightest”? Experience has consistently taught and surfaced three traits — over and over, year after year:
• Character,
• Competence, and
• Commitment
It requires character to act on our beliefs, competence to achieve goals, and commitment to see them through. These core values drive productivity resulting in profitability and sustainability for the benefit of Cincom and our customers.
How best to describe them?
CHARACTER • Ethical integrity and fundamental spirituality, • An emphasis on seeking solutions, not casting blame, • An open environment where honest communications are encouraged and honest differences of opinion are allowed, and • A commitment to managing on the basis of sound principles. Doing the “right thing” in a professional manner is a demand we make of ourselves.
COMPETENCE • An entrepreneurial spirit that relentlessly seeks to innovate within bureaucratic structures, • Creativity, • Decisiveness, • Initiative for self-growth, • Leadership, • A continuous seeking of the optimal balance between flexibility and control, and • A disciplined organisation that continues to learn and applies methods to achieve goals.
COMMITMENT • Commitment to one’s group, the company and to one’s fellow citizens, • Missionary zeal in representing the company and its products, • Sense of responsibility and personal empowerment, • Encouraging people to grow and empowering them to do so, and • Our promise to do what has been asked and our pledge to provide whatever assistance that is required to meet our shared commitment. To be successful, persons and organisations must act with character, competence and commitment in a harmoniously orchestrated environment that energises all and synergises everything. As an employee or employer, these core value traits are essential minimums.
The author is CEO of Cincom Systems - Mr. Tom Nies
NOT YET FABULOUS!
Deepshikha Monga & Niranjan Bharati, New DelhiThe Economic Times
The government’s fab policy, intended to encourage chip manufacturing in India, has not quite hit its target. While the government has received proposals worth $6.2 billion, none are for setting up chip manufacturing. In fact, SemIndia, which had announced plans to set up a $3-billion chip-making facility in Hyderabad, has not yet submitted its proposal. “SemIndia has not approached us with any formal proposal,” said a senior official at the department of IT (DIT). An e-mail questionnaire sent by ET to SemIndia CEO Vinod Agarwal didn’t elicit any response. DIT has so far received three proposals under the fab policy, including the first-ever LCD panel unit in India to be set up by Videocon at an investment of $1.8 billion. The other two are proposals for photovoltaic cell manufacturing units by Moser Baer ($3.2 billion) and Titan Energy Systems ($1.2 billion). The department has also received 14 enquiries, of which 3-4 are for chip manufacturing. Under the semiconductor policy, a company investing a minimum of $550 million for a fab unit and $220 million for other products like micro and nano-technology products would be eligible for government incentives upto 20% of the capital expenditure during the first 10 years, if the unit is located inside an SEZ, or 25% if located outside. The government plans to offer fiscal incentives to 2-3 semiconductor units and about 10 eco-system units under the policy. In October, Agarwal of SemIndia had said that the company would submit its proposal to avail the incentives within a month, while expressing disappointment with the policy guidelines stipulating companies to make the entire investment upfront, with the government picking up 20-25% equity in the project later. “It’s not a good guideline. Anticipating investments first and then, giving incentives doesn’t do much to build investor confidence,” he had said. Venture capital firm Sandalwood Partners and electronics manufacturing services major Flextronics are investors in the chip-making venture while AMD is the technology partner. SemIndia had started work on a $100-million assembly-test-mark-pack (ATMP) facility in Fab City in Hyderabad, which is expected to be ready by 2008- end.
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