Da Vinci, Plate Tectonics and CapEx Budgets

Here in San Jose, where Xactly is headquartered, the Tech Museum of Innovation – located right down the street from us – recently unveiled the world premiere of an exhibit titled ‘Leonardo: 500 Years into the Future’, billed as “the largest, most comprehensive exhibit of the innovative art, science and engineering works of Leonardo da Vinci” and “a once-in-a-lifetime opportunity to see how this genius of the Renaissance has influenced and inspired much of the technology we use today.”

Now, I already knew some things about da Vinci and his life, but I learned that in addition to being one of the greatest painters and sculptors of all-time, his ideas about improving the world around him were simply astounding. In a time when no real technology existed, da Vinci “conceptualized a helicopter, a tank, concentrated solar power, a calculator, the double hull and outlined a rudimentary theory of plate tectonics. Relatively few of his designs were constructed or were even feasible during his lifetime, but some of his smaller inventions, such as an automated bobbin winder and a machine for testing the tensile strength of wire, entered the world of manufacturing unheralded. As a scientist, he greatly advanced the state of knowledge in the fields of anatomy, civil engineering, optics, and hydrodynamics.” [source]

He did all this five hundred years ago! I think it’s clear that the assertion made about da Vinci that he was perhaps ‘the most diversely talented person who ever lived’ is unequivocally correct.

Why am I telling you all of this (apart from the fact that it’s fascinating, and I seek to enlighten and instruct)?

Well, I was going to open this blog post by saying that we’re living in uncertain economic times.

But I stopped and realized that that’s an understatement on the same sort of level as saying “Leonardo da Vinci was slightly ahead of his time, don’t you think? If he was alive today, I’ll bet he'd be smart enough to have his own cable-access show, or maybe get a job selling Christmas trees at Home Depot. Possibly.”

It doesn’t quite capture it – and the economic crisis we’re facing can’t be understated. So it got me thinking about the need for companies to cut spending and save money on upfront costs; budgets are being slashed all over the place. But in most cases, companies don’t have the option to stop buying solutions altogether, they just must make smarter decisions about how they spend their money.

Opting for a SaaS solution in order to save their capital-expense budgets makes a lot of sense for these companies. As the always-eloquent and erudite Phil Wainewright points out in his blog, this financial crisis should be an opportunity for SaaS companies to continue to grow.

Phil says in his latest post, “If credit remains tight, then one of the first things businesses are going to cut is capital expenditure — either because they can’t stomach the risk, or because they can’t raise the finance. The upside for SaaS vendors is that those cash-strapped businesses will find the pay-as-you-go SaaS model highly appealing — especially if it helps deliver operational cost savings at the same time. So while the credit crunch seems certain to harm the front-loaded cost model of conventional software sales, SaaS should continue to grow by picking up some of those canceled projects.”

Sing it, Phil. We are in lock-step with you on this kind of thinking.

Additionally, when one considers that among the hardest-hit entities at the moment are the banks and financial institutions, I enjoyed this article (published by AmericanBanker.com) that touts the advantages of SaaS and BPO as an effective way to cut costs in the current economic climate.

To quote the article, opting for outsourcing some processes and choosing Software-as-a-Service solutions “not only reduces the bank's operating expenses and protects them from cost spikes… it can also help institutions reduce their risk through service level agreements. This allows executives to focus their attention and resources on critical areas like customer experience and new product strategy to stay competitive and grow their businesses.”

Banks, as we all know, are not early adopters when it comes to technology. They are forced to remain fairly conservative and are not prone to making broad sweeping changes in the way they run their business. I like the idea that we can help them navigate through this choppy water, and help them look ahead into the future.

Maybe not 500 years ahead like Leonardo… but we’re working on it.




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