In this posting of his excellent blog Dennis Howlett makes an observation I would like to question:
"In the on-demand world, you have to continue to grow the customer base in real terms. It seems that in NetSuite’s case, the customer base is not growing as rapidly as they are leading us to believe. Given that Nelson stated the expected customer additions on a quarter by quarter basis are expected to be in the range 300-500, you can be sure this is a metric that will be revisited."
In my experience managing SaaS organization, I learned that functionally rich and business process supporting (read "complex") applications provide opportunity for strong subscription growth on the existing Customer base. It is very difficult to "lose" a Customer in this environment because of their high operational dependency, cost and risk they would have to assume to undertake such a move. Since NetSuite seem to be in transition to different business model from the one they started from, it is only logical that many of their early Customers, who were attracted by very different value proposition do not find the new one very compelling, and leave. Obviously for them the risk & cost equation is not compelling because they do not require such a level of process support.
Given very high cost of Customer acquisition, due to cost of sales and post-sales ramp-up activities, the subscription revenue expansion ( i.e. more users/licenses using the applications within the same organization) offer excellent profit margin alternative to chasing brand new customers at any cost. I do not advocate Sales entrenching, but balanced management of the sales pipeline has good economic reason.
Disclaimer: I have absolutely nothing to do with NetSuite, no have any investment interest in the stock.
I am very intrigued by a concept of Enterprise information flow based on knowledge workers’ conversations as opposed to "snap shots" of data, stored and based in contemporary databases.
"So we’re going to see some things change in the enterprise. Conversation is going to be captured and archived and retrieved and enhanced and allowed to flow. We’re going to use blogs and wikis and twitter and IM and audio and video, we may even have tiny pockets of e-mail and fax and (dare I mention it) telex. Every conversational action will hit an enterprise ping server, populate search engines, aggregators, data miners and online media and even text scrapers."
"Musing about enterprise information and flow" J.P. Rangaswami
This appears to be an attempt to deal with the perennial adoption problem – people like to communicate using unformalized data supported by conversations, chat, email and wiki technologies, while Enterprise software applications need normalized data to process into meaningful information in order to support business processes. The root of this problem can be exemplified by the desire to gain great value of 360-degree visibility of Customer at a minimum of user keystrokes, which in my opinion is not a technological issue, but a change management one. It requires substantial intellectual effort to transform contextual data of tribal knowledge into Enterprise grade information, and even more so, if we consider a model of extended Enterprise, as it is proposed:
"We will be able to manage vendors at least as well as they manage us. We are calling this VRM, Vendor Relationship Management. The project is being launched within the Harvard’s Berkman Center. The core concept is that the individual should be able to manage their relationships with their vendors and suppliers, based on the idea that they actually know more about specific preferences, updated data, etc. And, further, that most CRM systems oversimplify customer data in order to segment, and to effectively manage the info; ultimately they are just a sales system, not a relationship system."
Doc Searls
"The need for change bulldozed a road down the center of my mind. – Maya Angelou (-1928)
Perhaps a better question to ask would be "How can we "mine" conversations to support a Business Process? – There is a lot to learn.
In the words of Robert Heinlein – "I am only an egg".
“Measurement of the project’s value post-implementation is often sadly lacking unless the organisation has a PMO or other business structure that sees and measures the big picture.”
http://blogs.zdnet.com/projectfailures/index.php?blogthis=1&p=574
In my 30 years of experience there was only one project which had specific monetary targets to achieve, and metrics to assign accountability. Needless to say this is still my favorite one. IMO opinion that is the start of any business case for any BPR/IT project.
A blog about experiences, curiosity and the never-ending search for ways to do better things better