Category: SaaS

I have been helping a friend of mine who is moving into town get access to local resources such as carpenters, painters, and restaurants. An email I received from him today had the standard list of questions on utilities but the one that surprised me most was, “Who is your cable provider and do they offer VOIP?” This was a surprise since he is not the most bleeding-edge technical guy. In my mind VOIP really hit the mainstream this week with this email, Thursday’s Wall Street Journal (unfortunately subscription required) article about VOIP’s threat to the Bell companies, and today’s New York Times front page coverage in the Money and Business section.

While programs like Skype offer free P2P telephony over computers, services like Optimum voice offered through Cablevision and Vonage are the true groundbreakers that are bringing VOIP to the mainstream. Mainstream users do not want to be tied to their desks with computer headsets. With these services, customers can simply plug their phone into an adapter which converts analog signals to digital. There is no need to buy new equipment or even change how you use the telephone. Vonage claims to already have 55,000 lines. Since there is no competitive advantage technically in the VOIP service business, it will be interesting to see how cable companies, startups, and Bells compete with each other on marketing services and pricing. The great news is that consumers will only reap more benefits as VOIP continues to gain market share.

Siebel and IBM team on hosted CRM service

It feels like 1999 again when the ASP (application service provider) business model was all the rage. Why is Siebel trying this again when their most recent foray was a complete disaster? Bottom line: Salesforce.com is eating their lunch. Siebel’s enterprise license revenue model is coming under real pressure as large enterprises are getting tired of spending millions of dollars upfront with no real ROI.

Could this be the return of the ASP model? In the old days, the promise and hype of many ASPs were as high as their burn rates. A number of these companies poured tens of millions of dollars into infrastructures that only had a handful of customers. The end result for most was disastrous. Despite the many failures, I am conjecturing that the ASP will be back in a BIG WAY for the following reasons: tight budgets, increased comfort level of customers to have data offsite, broadband connections allow for always-on access, and vendors with right-sized business models designed to make a profit. When and if the capital markets return, let’s see how these companies perform.