Boundary Conditions

Someone very clever once wrote, “Human beings are naturally drawn to ‘boundary conditions’ “ – for example, where land meets water, where the earth touches the sky, where space meets time.

In other words, we like to congregate at these boundary conditions; stand on the edge of something and gaze over at something else.

Is that why beach houses are so expensive?

I feel as though the SaaS market is at one of these boundary conditions right now. As we see more and more companies choose on-demand solutions, the ‘old way’ of doing things is giving way to the ‘new way’ of doing them.

It’s not hard to see why this is so: when one considers the lower cost of entry, lower TCO, instantaneous upgrades, plus the freedom and flexibility that come with a subscription-based service model, the exploding popularity of SaaS makes perfect sense.

Evidence of the ‘SaaS explosion’ can be found all over the place. Recently, Penny Crossman wrote a terrific article describing the “almost-meteoric rise of SaaS on Wall Street”.

On the same day last week, Salesforce.com announced not only the acquisition of InStranet (to strengthen its service and support offerings), but also record earnings for their second quarter.

The SaaS market is spectacularly healthy and growing at a dizzying pace. According to IDC’s Worldwide Software On-Demand Forecast 2007-2011 the CAGR is forecast 32% among companies of all sizes, and another analyst (that I'm not able to mention by name) estimates that Software-as-a-Service will grow to a $19.3 billion industry by 2011. This means that SaaS – already a healthy $6 billion industry in 2006, will have more than tripled in size in less than five years.

If we, as an industry, have not already reached our tipping point, it seems to be rapidly approaching.

Won’t you join me at this boundary condition? Let’s gaze over at the old, on-premise world and be glad that we’ve claimed such a valuable piece of beachfront real estate.

Upcoming Business Finance Webinar: Leveraging the Power of On-Demand Analytics to Drive Finance and Sales Performance

This upcoming webinar expands on one of our previous posts:
The Power of Analytics


Utilize "Post-Sales" Data to Gain Key Business Insights

Register to learn more.

In this Webinar, Xactly’s Christopher Cabrera and IDC’s Henry Morris will discuss how post-sales analytics can provide new and strategic insight into an organization’s selling patterns, commission spend, product performance, sales rep and team performance, and sales plan effectiveness. They will examine how post-sales data – traditionally scattered across a variety of disparate systems including ERP/order entry, HR, Pricing and Product – can be now be integrated, modeled and analyzed with an eye towards enhancing business strategies, changing sales rep behaviors, and super-charging sales organizations.

Participants will take away:

* How aggregating data for on-demand analytics can be streamlined efficiently
* Best practices for driving financial and sales performance with analytics
* Best practices for modeling and analyzing post sales data to optimize finance and sales performance
* A view of finance and executive dashboards and custom analytic capabilities for sales performance analytics

Featured Speakers:
Christopher W. Cabrera, Founder & CEO - Xactly Corporation
Henry Morris, Senior Vice President Worldwide Software & Services Research — IDC

Date: September 18, 2008
Time: 1:00 p.m. EDT

Register to learn more.

The Power of Analytics

In recent years, prices for raw metals and minerals have skyrocketed. Mining companies have fanned out to all corners of the globe, conferences have been convened to discuss the topic, and all the while prices continue to rise.

But did you know that right now, at this very moment, there are tens of billions of dollars worth of iron ore and other valuable metals and minerals just sitting on the floor of every ocean on earth? Scientists have known about manganese nodules for decades (as a matter of fact, geologist A.A. Archer estimated that the sea floors and abyssal plains of the ocean contain something like 500 BILLION TONS of untapped metal ore). Iron prices should be dirt cheap!

So what’s the problem? Why has this vast natural resource lain undisturbed for decades? The issue is that no one has been able to successfully come up with a way to mine it cost-effectively.

This got me thinking about the difficulties of different kinds of mining, specifically DATA mining.

For a long time, many companies have been talking about the ability to provide Analytics. And I will admit that there are some phenomenally cool, whiz-bang products out there in the business intelligence space. However, there has always been one inherent problem with this: Analytics are only as good as the data they’re analyzing.

Those whiz-bang B.I. solutions can only do their cool stuff once you have the underlying data.

Getting at that data traditionally has been harder than stripping iron ore out of a manganese nodule eighteen fathoms below. This is the dirty little secret around why more than HALF of all data warehouse projects fail.

You see, first a company needs to figure out where the data IS, and more importantly, how to get at it. This usually involves getting IT involved and purchasing an ETL tool to extract and cleanse the data.

Then comes the hard part: aggregating the data into one place which requires architecting the data schema and building a data mart or data warehouse. Then, a presentation or (BI) layer must be selected in order to view and analyze the data. Of course, you will need to do a lengthy requirements phase to talk about what you want to see, etc., reports will need to be built, multiple constituencies need to be involved. There are a lot of moving parts.

Lots of money has been spent just analyzing why these massive data warehousing projects fail – you can read just a small subset of some of the findings here and here.

What about analyzing your CRM data, you may ask? You could certainly do that, but what are you really analyzing? Pre-sales data entered by sales reps, complete with equal measures of sand-bagging on one side and pie-eyed optimism on the other.

No self-respecting CFO would run his or her business on such data. I’m talking about true POST-sales data – getting to this rich data is what will make Analytics truly sing.

What if a company could streamline this entire process and make it fantastically simple – giving you access to ALL your post-sales data without any intervention from IT, tedious consulting projects or ETL tools?

Well, don’t despair, Xactly to the rescue! But don’t just take my word for it…

If you speak to Henry Morris (SVP Worldwide Software & Services Research at leading research firm IDC) he’ll tell you: "I always thought business intelligence [BI] on demand would have difficulty taking off, since the application has to get its data from an outside source. But Xactly already has your data.“

As a byproduct of solving the variable compensation problem for companies, Xactly has pre-built a sophisticated data warehouse that contains every bit of this rich data. Not only that, but because of our fixed data schema (just one of the innumerable benefits of being a true on-demand company), every company can get access to this data.

We then layer a wonderful Analytics engine over the top of it, complete with all the tools you could ever need, and now you’ve got something companies have thrown millions of dollars at, usually ending in frustration and tears.

Let us tell you more about it – you’ll wonder where we’ve been all your life.

Now that we’ve got this problem licked, I’m off to tinker with some ideas on these manganese nodules. I may have a few tricks up my sleeve.