Enterprise 2.0 key findings

Kudos to all those who participated in, organized or even attended the Enterprise 2.0 conference in drizzly Boston last week.  There is a lot to write about and it doesn’t easily fit into a single blog post.  So I have decided to write a few posts that address different themes running through the event and eventually tie them together into an update of this post with links (in my not so copious free time).

The big ideas that I took away include disruption and evolution, ROI and a need to sharpen our focus.  Here are a few thoughts on a very good show.

Disruption and evolution

The Tuesday keynotes generated needless confusion by asking a simple question, is Enterprise 2.0 a revolution or an evolution?  Such a question is often resolved in a cowardly compromise to split the difference.  As they used to say on SNL, “It’s a floor wax and a dessert topping!”

But not so fast.  In this case, splitting the difference by saying it’s both is not far off the mark.  It is both revolution and evolution but only because some people prefer to see a difference between the two.  In fact, evolution experts might tell you that the two are part of the same continuum.  They even have a name for it: Punctuated Equilibrium.  Enterprise 2.0 is a revolution (punctuation) made possible by years of stealthy evolution (equilibrium) — small changes with incremental effects that, with critical mass, result in the revolution we see.

Many of the sessions I attended struck that tone.  One of the best was “Networked: How the 2.0 Enterprise Makes Itself Transparent, Participatory and Collaborative,” by the husband and wife team of Jessica Lipnack and Jeff Stamps from Netage (www.netage.com).

The thought that sticks with me though is how hard it is to achieve punctuation as time goes on.  Entrenched interests from the last revolution draw a lesson from their own success and work to prevent the same disruption from happening to them.  Look at Iran, for example.  No more street protests, thank you very much.

A good point made at a keynote by Matthew Fraser co-author of “Throwing Sheep in the Boardroom” is that the enterprise phase of Enterprise 2.0 failed to ignite because entrenched, hierarchical interests in corporations successfully thwarted it.  The social networking revolution, which started at the grass roots is the result.  The question to be answered is now less whether but how social networking and social media will scale corporate walls.

ROI is not important

I just love this one because I am a disruptive thinker and showing the ROI analysis for me is like having to be constantly reminded to say please and thank you and to put my toys away.  Your pants are on fire.  Do I really need to say, “Pardon the interruption,” before I get the extinguisher?  Sheesh!

I am back.

Stowe Boyd, CEO, Edglings, said it best.  It’s not that ROI is unimportant, many people in enterprises around the world would violently agree with that.  But there are certain times when ROI may be irrelevant or at least an irrelevant barrier.  That time is during a paradigm shift or revolution cited above — we are in an ROI is not important era all of a sudden.

A real paradigm shift happens quickly and when it does it wipes out what stood for business as usual and replaces it with something new.  For example, an asteroid hit this planet about 65 million years ago and wiped out most of the dinosaurs.  (I say most because there are scientists who think that birds are their direct descendants and who am I to dicker?)  The asteroid was not the paradigm shift but it caused one and the shift took many millions of years to fully roll out.  But it was the primary cause that made dinosaurs irrelevant and mammals ascendant.

In business change is more rapid and usually less violent but paradigms nonetheless shift dramatically.  We are the mammals of earlier shifts.  Boyd gave the example that after World War Two, the major shift was to place a telephone on each employee’s desk.  No one at the time could produce an ROI analysis that would provide the justification and many people worried that the phones would be abused for personal use (sound familiar?) but the shift proceeded.  It was unstoppable and today we couldn’t imagine a time when a phone was optional or reserved for a chosen few.

Boyd’s point was that placing the phones on desks was so important, such a game changer, that few people waited for the ROI analysis before beginning deployments.  Of course there were laggards but history does not record their names.  We could trace the same trajectory through such radical deployments as typewriters, mimeo machines, copiers, faxes and, in our time, PCs.  It took about a decade before the full productivity of having a PC on nearly everyone’s desk produced the significant change (Punctuated Equilibrium again) that seemingly overnight produced one of the greatest productivity bursts in history.

Let’s sharpen our focus

It’s fine to tout the importance of the social revolution taking place right now whose end-point is Enterprise 2.0 but there’s still a lot of work to do.  The greatest challenge is to accept the paradigm shift for what it is and not some kind of extension of an earlier paradigm.  We see paradigm extension all the time in the cut-over from one paradigm to another.  The old paradigm adopts some aspects of the new in an effort to forestall change.  We see it right now in the silly argument about software as a service (SaaS) and multi-tenancy’s centrality to it all.

At the recent Sales 2.0 conference, also held in Boston, I got a whiff of paradigm extension from most vendors still confused about social media’s centrality and purpose.  Social media is not a way to turbo charge your spamming efforts or to round up more low-grade suspects for your pipeline.  Sales and a lot else needs to look at social media with open eyes and a minimum of pre-judgment if we are to be successful in bringing Enterprise 2.0 to life.

So there, in a large nutshell, is my first cut at what happened in Boston last week.  Despite the rain, Boston was — and remains — a good place to start a revolution.

Lesson learned from LucidEra

LucidEra’s unfortunate announcement that it was suspending operations hits the SaaS industry hard.  The on-demand sales analytics company had a good record of providing valuable solutions for sales organizations and managers interested in better understanding their pipelines and deriving meaning from their SFA data.  But ceasing operations highlights one of the chief risks inherent in adopting a SaaS solution namely, that an application can become unavailable.

Fortunately, the people at LucidEra are classy people and they have spent the last week or two trying to ensure that their customers could migrate their data to another on-demand provider.  They called it an “orderly transition.”  That’s about the best you can expect and if every SaaS provider that goes out of business in the future did that we would have the rough equivalent of the scenario when a conventional vendor goes belly-up or stops supporting a version.

The conventional software model leaves you with the software that will run as is regardless of whether its vendor is solvent.  Support and upgrades are a separate issue and they do not materially differ in either case.

So to the voices that have said LucidEra’s demise is proof of why conventional software is better, I say not so fast.  Throughout the SaaS era — roughly ten years — the SaaS industry has had to cope with numerous similar situations where there were no precedents.  Up-time, security and disaster recovery all had to be re-thought for SaaS and vendors invariably found solutions.  LucidEra is providing another example of a SaaS provider figuring out a solution to a tough problem and I think they should be applauded.

Nonetheless, the SaaS industry should not act like this kind of thing could not happen again and it would be wise to consider contingencies for a SaaS company going down in the future.  It may be wise for customers to consider requiring that SaaS providers carry insurance against failure or, more precisely, insurance to cover the contingencies associated with shutdown.

Surely some big insurance company would be happy to underwrite the risk in the same way that multiple insurers already provide business insurance against all sorts of calamities including errors and omissions.  Such insurance might not have been feasible ten, five or even three years ago.  But the popularity of SaaS and the business advantages it offers clients says that the risk pool is reaching critical mass if it has not surpassed that threshold already.

Let’s say insurance against a SaaS company’s demise costs a dollar per month per seat declining for really big implementations or customer bases.  Who couldn’t or wouldn’t afford that, especially in this market?  A dollar isn’t much but given the market I can’t see how it wouldn’t be a profitable business.

I don’t expect that any SaaS company will rush out and advocate for insurance and, as is often the case, demand for such insurance will have to come from the customer.  But all of the pieces seem to be in place and, like mirrored data centers and SLAs (service level agreements) I expect transition insurance in the event a SaaS company goes out of business will become standard fare in this still evolving industry.

Selling your story

We are stuck in a mode where customer experience is the driving force in much of CRM, especially sales.  Do everything you can to ensure a good customer experience and sales will happen, or so we believe.  But we don’t define what an experience is and very often we confuse an individual’s experience with a company or product with the concept of elevating a product or service to an encounter that is so substantial that it becomes an experience.

The concept of an experience was predicated on the second definition posed more than ten years ago by Joseph Pine and Jim Gilmore but it was somehow morphed into the first definition.

The problem with the second definition is that most products and services do not lend themselves to becoming experiences.  The problem with the first idea is that any vendor can cajole you into believing you had a good encounter, but if everyone is doing this where is the critical differentiation you need to stand out?  Together, these definitions sum up the challenge.

I would not say that customer experience or the experiential side of the customer relationship is not important.  But I would aver that it isn’t enough.  Furthermore, I think we cling to it as though we are drowning and our laser focus on customer experience is crowding out the attention that we should be giving to other aspects, like operations.  In the current economy, blind adherence to customer experience is like pushing on a string.  For those reasons, I think it’s time to drive a stake through its heart.

Now, let’s wait a moment until the shouting subsides.  Just a moment.  Maybe two.  Ok, let’s proceed.  What did I mean?

Whether we are talking about customer experience or its mirror image, operational excellence, we are talking about the same thing, namely, innovation.  The question to be answered is how do we innovate in sales situations now, today, in this economy?  For reasons related to pushing on that string, I think we need to innovate around operations rather than experience.

The present economy is notable for the demand destruction that has taken place due to the credit crisis.  Without credit people and companies have less latitude in purchase decisions.  They don’t make purchases unless there are hard, objective reasons for doing so.

In sales and marketing, the focus on customer experience needs to shift to the operational needs of enabling sales people to sell.  That might sound obvious, even tautological, but it is not and it can require a significant shift in our thinking.  Two recent books illustrate my point.

The first, “Whoever Tells the Best Story Wins” by Annette Simmons explores the importance of story in business.  Simmons’ point is that we all have a plethora of hard data about our products and services but that data has a diminishing effect on selling.  She quotes George Lakoff, the famous linguist, who said that how we frame an issue has a dramatic effect on perceptions.  Framing is part of story telling and stories are subjective — and dramatically different from the hard, data-driven messaging we routinely deliver in a sales process.  Ironically, all that data is what we dispense while we are attempting to provide a great customer experience.

The other book, an eBook by Jeff Ernst of Kadient, discusses how the best sales people intuitively know how to deliver the right information at the right time in a sales process to achieve outstanding results.  Ernst’s point is that everyone in sales needs to be able to deliver the right information, to tell the right stories.

Ernst boils an ocean of information down into a short book with a handful of new rules for selling, which I think anyone would benefit from.  Rather than a rote exercise in sales methodology, Ernst counsels listening to customers and responding with the information that resonates with particular buyers.  His differentiation is in how he determines what stories resonate.

The high achieving sales people are telling the right stories instinctively.  These are stories with a purpose and the approach, which is embodied in sales playbooks, can be quantified by collecting data about which stories worked best in a very limited universe of situations faced by a sales team.  As Simmons writes, “Story is how humans interpret things as good or bad, important or irrelevant, safe or dangerous, and who is ‘one of us’ or ‘one of them.’”

A sales process is all about a sales person becoming “one of us,” long before the customer makes a purchase.  And I would suggest that unless a sales representative passes that test the actual deal will always remain out of reach.

Ernst prescribes a sales process in which companies enable their best sales people to share their stories about how they conduct the most successful sales campaigns.  The information, as well as advice about when to use it, is captured in sales playbooks and made available in chunks that are easily absorbed by the representatives.  Ernst says sales people are just-in-time learners so why burden them with three ring binders and long training sessions they won’t remember in a month?

This approach falls under the heading of sales enablement, a term that has received increasing notice recently.  At its heart is a pragmatic approach to doing what works by understanding that people, buyers, make logical decisions for emotional reasons, as the great sales trainers frequently say, rather than relying on a mountain of “facts.”

In her book Simmons quotes Barry Schwartz, author of “The paradox of Choice: Why More is Less,” in which he writes, “There’s a point where all of this choice starts to be not only unproductive, but counter productive — a source of pain, regret, worry about missed opportunities and unrealistically high expectations.”

You could say the same about customer experience.  We can’t layer experiences onto confusing processes without risking customer overload.  Like anyone, a customer doesn’t know what he or she doesn’t know and customers look to trusted advisers — sales people who have become “one of us” — for answers.  The best customer experience is one in which the customer is lead on an exploratory mission through the chaos of a buying process.  Providing that experience requires a good deal of operational organization on the other side.  It is why sales enablement is so important today.

This revolution is being televised, blogged, tweeted and tubed

Events taking place on the streets of Teheran may have an important affect on how social networking rolls out across the rest of the world and that includes the CRM world.  Last week the media began carrying stories about a “cyber revolution” that may be happening in the Islamic Republic, but those stories fail to account for the whole story, the yin and yang of social media.

We tend to think about social media as unalloyed goods because they have benign and possibly beneficial outcomes but our thinking is clouded by one important point: social media is literally a free for all.  Any tool, including social media, can be used for good and not so good purposes as we have learned repeatedly. 

Much was made about the U.S. State Department asking Twitter to delay taking its system down for maintenance until night time in Teheran so that the micro-blogging site could continue its role in support of protesters.  But who said that only the good guys were using these Internet tools?

It might only be 1388 on the Muslim calendar but the government and many religious schools have been into modern Internet communications — including blogging — since 2006 according to an article I saw.  The New York Times also weighted in on the significance of social media on Sunday.  Regardless of your thoughts about the government in Teheran, it has been a party to all of the twittering and blogging and video sharing that we in the West have used to trumpet the benefits of social media.

It may be highly ironic but both sides in the dispute about the recent Iranian presidential elections are part of the same communities.  The students might be able to blog about a crackdown or upload some video but the authorities can use the information to identify people in the videos, individual bloggers and tweeters with the result that they can arrest and shut down dissent.  The revolution may be being televised but live or near instantaneous feeds we get in the West come at an increasingly steep cost to the participants.

I think the connection with CRM is clear.  No, you don’t have to worry about big brother coming down on you, at least in the U.S., at least not yet, but the example of Teheran and the existence of social media monitoring and management technologies for business purposes, should give us all pause.  I repeat, it is a free for all out there and social media are adding some zip to the situation.

It might be good for us all to consider a code of conduct for using these powerful tools, at least in our business lives.  Unlike many similar codes that are designed to protect others, a social media code of conduct would have powerful benefits for the people generating content.  It would serve as a personal reminder that the Internet is an increasingly dangerous place and like any dangerous place, we must have our wits about us whenever we venture forth.

Some parts of the code might be obvious, like performing a bit of fact checking before re-distributing third party content or refraining from certain activities because they may have unpredictable consequences.  We can’t be perfect about predicting the future, of course, but just as we instinctively avoid say, spitting into the wind, we need to develop instincts regarding the combination of cell phone cameras, alcohol and business meetings just for starters.

Other instincts might be commonsensical but they may not have been figured out yet.  For example, how often do you perform an Internet search on yourself or your company or your corporate officers?  Do you know what the rest of the world is saying about you?  If you are in corporate marketing or have high-level responsibilities you might consider instituting a policy.

Finally, what information about your company is confidential and how much of it is being put out on the Internet in the normal course of business?  Even it you think you run a tight ship, your job postings offer unique insight into staff turnover and product development.

I am trying to be careful not to refer to any of this as the “down-side” of social media because none of this is inherently part of the technology.  We are witnessing the moment when we discover just how powerful a new technology is and it is sobering.  Social media brings new capabilities to all of us.  The hard part will now be to domesticate it to first do no evil.

Enterprise 2.Oh wow!

Ok, last year’s Enterprise 2.0 conference left me with the impression that this was the flavor of the month.  Its significance escaped me.  This year it was completely different.  Since I have been tracking social media, social networking and the like since 2002, I don’t believe that I had failed to get the religion.  I think it has taken a few years (this was the fourth E2.0 conference I believe.) to get the ideas and the messaging right. That’s all water over the dam and if you were stuck in rainy Boston for this conference, you probably got the impression that last year was a long time ago.

So, it’s time t put a marker down.  This is it, the real deal, a disruption is forming but it isn’t here yet.  Too many vendors are still (and will be for a while) stuck in the gee-whiz isn’t this technology cool phase.  It’s more like a weather pattern disturbance off the coast of Africa that has the potential to grow into a Caribbean hurricane give time and a few readily available ingredients.  It was fun to be at the conference, to absorb the mood and the thinking and to take copious notes.

The notes will form the basis of about three posts over the next few days.  They will appear here when they’re fully baked.

Red Sox and the 4-4-1 strategy

Today’s Boston Globe sports section examines the “problem” of what to do with all of the pitching talent in the bullpen.  There are 13 pitchers and 6 starters or starting quality arms.  An article by Tony Massarotti examines five solutions four of which involve demoting a pitcher to the pen and the last one suggests a 6 man rotation.

I think it’s time for bolder thinking.

I believe there should be two objectives for figuring out this rotation (in addition to winning most games).  They are:

1. Reducing late season fatigue due to pitching too many innings

2. Keeping pitchers’ heads in the game

The five day rotation has a rhythm that the pitchers are accustomed to.  They rest, recover, throw on the side and work on technique, and eventually get ready to pitch again.  We wouldn’t want to disrupt the five-day rotation because it might be hard to get everyone on the same page.  But we could reduce the innings pitched to preserve arms for the post season.  

I suggest pairing two starters or a starter and a reliever as a tag team — the 4-4-1 strategy.  Each would be responsible for pitching 4 innings.  That leaves the closing duties to the three remaining pitchers in the pen.  And if a game is close or the pen is tired, asking a starter to pitch an extra inning (the fifth or the ninth) would not be a strain.  To ensure that the starters are kept happy a “starting pair” of pitchers could alternate which chunk of 4 innings they pitch effectively giving each pitcher a start every ten days.

The down side of this rotation would be to leave the pen depleted of short relief.   But frequently we see pitchers brought in for the later innings because a starter runs out of gas or long relief because the pitcher’s stuff is no good or because the manager wants to have a match up of lefty vs. righty.  But all these strategies are attempts to make due with insufficient pitching power to begin with.  In a 4-4-1 strategy we would know a new pitcher was coming after four or possibly five innings no matter what.  

In the first four innings of a game these starting pitchers can be reasonably depended on to throw well and I wouldn’t worry too much about a Red Sox starter getting shelled and leaving the game before four innings are up.  It could happen but we go into a game knowing no team wins all the time.  In the worst cast scenario, if a starter got pulled after only two innings the second starter could be reliably counted on to go the next five or six.  

Lastly, the matter of matching up relief pitchers and hitters in the late innings would be less important because there would always be a fresh, high quality pitcher on the mound.

When I was a kid pitchers routinely went 9 innings which resulted in some very tired arms in the later part of the season and the last third of an inning could be a hitter’s dream as the pitcher’s effectiveness wore down.  (As a reminder we need look no further than that painful memory of Pedro and Grady Little at Yankee Stadium in the ALCS.)  Then we went to 7 innings for starters and to monitoring pitch counts, which is better but we still see late season fatigue and still too many head games (and station breaks) late in games as pitchers are brought in to face one batter.  

A 4-4-1 strategy may be the next logical evolution of a system that started with greater reliance on relief pitching, and in a way it is a throw back to little league. Few teams have the talent to even attempt this strategy, which is a good thing because it could prove to be the Red Sox secret weapon for the second half of the season.  

A great way to test the effectiveness of 4-4-1 might be to briefly implement it in the run up to the All-Star Game.  If the experiment blows up it will have limited impact but if it works it could mean lots of fresh arms in September and October.

GM’s Demise and the Rise of CRM Culture

They have been discussing General Motor’s loss of market share in business schools for decades already and the added denouement of the company’s bankruptcy filing will doubtless drive many academic papers for decades to come.

The roots of GM’s fall from grace are numerous and it would be incorrect to attribute the fall to any single factor.  Like Rome’s fall there were many root causes and it took so long that when the end came, life as people knew it simply continued.  Far more traumatic and catastrophic was the instantaneous obliteration of the city of Pompeii. 

At least part of the fall can be attributed to GM’s being out of touch with its customers which has been documented for many years, including in a wonderful 1984 book by David Halberstam, “The Reckoning.”  Thought the book is mostly a comparison of the number two car companies in America and Japan (Ford and Nissan, at the time),  there is ample discussion of GM as well. 

In the book Halberstam tells an illuminating story of how company executives were all given company cars that were kept in heated garages and scrupulously maintained during the workday.  These pampered cars never hiccupped and the executives who drove them never had the same experiences with the product as their customers. 

For a long time, GM, Ford and Chrysler all dealt with the customer in ways appropriate that were appropriate to their times.  They were manufacturers running large factories and in order to get the economies of scale needed to make their complex products affordable, they found ways to make customers want the relatively undifferentiated things they mass-produced.  It was a twentieth century mind set and it worked brilliantly — so well in fact that GM actually made money every year during the Great Depression.

Everything changed with the Pepsi Generation.  People like you and I decided we were individuals and wanted to be treated that way.  Manufacturers tried to catch on and car makers were a prime example offering every conceivable option a la carte down to five or six engine choices.  Lead times lengthened, quality was never high but it declined too, and production runs over shot and undershot demand.  Car dealers nonetheless found ways — through discounting and sales — to fit round customers into square cars.

Japanese and other foreign manufacturers took a different approach to the American car market.  With long shipping distances and no dealer network to speak of, they realized that they would either have to build to very high quality standards (Honda, Toyota and Nissan for example) or not play in the market.  Remember Yugo and Sterling?  Foreign car makers took a Zen approach to selling cars.  Simplify the process, reduce the number of choices, make the most popular options standards.  There would be less haggling and animosity as a result.

You already know this, but there is a point. 

CRM entered the picture around this time, though even today both American and foreign dealerships are among the least well penetrated CRM markets.  But CRM is more than the technology; it is a way of doing business.  Car dealers need to move units, there’s no way round it.  But look at how they do it.

A typical American car company ad on TV positions the product as secondary to the great deals now being offered.  Discounts, reduced or eliminated interest rates and free options are what we hear about from Detroit.  In marked contrast, foreign vendors talk about higher values like reliability and security.  They have taken the lead in vouching for the reliability of their products and have taken the radical step of even guaranteeing the security of your job.  If you lose your income, they say, bring the car back with no penalty.  Some will even make your payments for a short time.

Detroit’s troubles and their mirror images in foreign fenders is emblematic of the failure to implement CRM concepts.  A mature market like autos should not be a late adopter of the ideas if not the tools of CRM but that is exactly what has happened in Detroit.  The bankruptcies of GM and Chrysler point to that failure but there is also reason for optimism. 

It won’t be a sale that gets Detroit back to full strength.  It will take many months and probably years of carefully listening to customers and ditching once and for all the 20^th century mindset of mass production and huckstering.  In my view I don’t see a lot of alternatives for Detroit than for the automakers to embrace CRM and social networking.  There are proven things they can do that will result in better products and finer tuned messages to a public that still needs reliable transportation. 

If they go more in a CRM direction I expect that the car companies will give CRM a new boost at a time when this market could use it.  You might say that what’s good for GM is good for CRM and vise versa.

Is it SaaS or pseudo-SaaS?

We’ve seen this movie, right? 

It’s amazing to watch the software industry re-engage in the single vs. multi-tenant debate for enterprise SaaS computing.  After several years in which the debate seemed to be settled a new round of claims and counter claims is shaping up giving new meaning to the idea of “much heat and little light.”

SaaS vendors are contacting me with stories of new entrants in their markets claiming to offer software as a service but without multi-tenancy.  What’s going on here?  Enough to write a book, probably, though I doubt if anyone would read it.

I’m thinking that the usual has happened.  After years of warning signs that the conventional software business model was increasingly misaligned for the future, SaaS solutions have become a threat to conventional vendors.  During those years of warnings, many conventional software vendors chose to do nothing to upgrade their offerings and businesses to the SaaS business model — including rewriting their code.  These vendors are now attempting to throw a Hail Mary pass.

It has been apparent to anyone with a functioning eye on the software business that the on-demand model was moving in, setting up shop and planning to stay for a while.  Now that the lag time is really up, vendors that did nothing are slapping browser front ends on their products and offering to “host” their wares on their own servers and calling it literally “software as a service.”  They’re literally right too — it is software delivered as a service — but these offerings are a long way from offering the power and flexibility of true SaaS based on a multi-tenant architecture.  I think of it as pseudo-SaaS.

The crux of the issue is the architecture model — single tenant or multi-tenant?  Single tenant simply puts conventional software into a facilities management paradigm reminiscent of the 1970’s.  You get software delivered as a service and certain other benefits like fixed pricing and reduced overhead compared with doing it yourself.  But you miss a lot too.

What pseudo-SaaS vendors are not able to provide is all of the benefits of a single code base that enables rapid configuration, simplified upgrades and integration, significantly lower total cost of ownership and a lot more.  More importantly, multi-tenant SaaS is hardly standing still.  The newest wrinkle, Cloud Computing, depends on the multi-tenant model for its underpinnings. 

Cloud Computing promises great things like anywhere computing where your information is always accessible and multiple deployments from a single application definition.  That means your applications run on your BlackBerry or iPhone as well as your PC or laptop without a massive porting effort.  Then there’s integration.  Applications built on multi-tenant platforms are far easier to integrate and can more easily contribute to a best of breed scenario that supports your business processes.  No more having to buy everything from a single vendor.

All this and a lot more is possible because multi-tenant SaaS brings a lot of standards to the table while single tenant solutions use the standards of a particular vendor.

If I could translate the single tenant/multi-tenant debate to telephone service, I would say it’s the difference between buying a rotary phone or a cordless model.  Skeptics will say the rotary phone is just fine for basic communication and they’d be right if voice communication was all anyone wanted to do.  That’s because the network is backward compatible.  But look at what you give up — voice mail, auto-dialing, redial and lots more.  It’s all stuff we take for granted because the standard has moved on.  And it’s all made possible by a better design of the basic service.

Multi-tenant is like that.  It’s the design of the future.  We can argue about single tenant and multi-tenant and it will confuse some technology buyers into making bad decisions.  But it won’t change history.  Because of bad decision making earlier in this decade a lot of software companies are being increasingly left high and dry by changing times. 

They’ve got lemons and they’re trying to make lemonade.  Fair enough, there might still be companies out there that can’t see past the traditional objections of security or mobility or whatever to embrace multi-tenant SaaS.  For them a single tenant solution might look really good and it will deliver business benefits the same way a rotary phone would let you make an emergency call — though I doubt you could simply dial 911. 

Just don’t tell me there’s no difference between the two models.  There’s a gap between the two models as big as the Grand Canyon and it’s growing.

Bing (Bang, Bong)

Microsoft’s new or rebadged search engine, bing (www.bing.com) is pretty nice but I question the ad strategy.

Clearly, Microsoft had to do something.  Various ratings agencies put Microsoft’s share of the search market in single digits.  Web analytics vendor NetApplications gives Google 81.5% of the global market vs. about 3 percent for Microsoft according to an article by JR Raphael in PC World.  Nonetheless, and perhaps against common sense, Microsoft’s strategy appears to be attempting to leverage dissatisfaction among Google users.  This approach worked wonderfully well a few years ago for Salesforce.com against Siebel but it was an apples and oranges comparison.  The two had vastly different technologies and markets and Siebel had “issues.”  Equally effective is the job Apple continues to do on Microsoft with the Mac/PC commercials. 

In each case the campaigns tap into real disaffection by the buyer for the leading vendor’s product.  But it is questionable that the disaffection Microsoft is trying to tap into in their first ad for bing, “Manifesto,” is even there.  The ad tries to make a connection between the economic meltdown and “search overload” Microsoft’s new metric and reason to claim search superiority.

Who knew?  Who knew that the entire economic collapse could have been somehow prevented by simply having a better search engine?  The nonsequitur is all very reminiscent of some 1960’s TV ad for laundry soap.  As a matter of fact, didn’t the Rolling Stones mock that whole gig in “Satisfaction” — “When I’m watchin’ my TV/and that man comes on to tell me/how white my shirts can be…”

Bing might be a good product.  It delivers a lot of relevant information tangential to your original search and that can make the search process more direct.  Many people will like this.  Of course Google recently presented an upgrade too but for them 81.5 percent market share is a position that can only go in one direction eventually.

But while Microsoft may have engineered a good product in bing, the company’s ad campaign shows that it still can’t dance the new dance.

Shih wrote the book on social media

Clara Shih is a friend I met through Salesforce.com.  She recently published The Facebook Era, which looks at the relationship of social networking to front office computing.  She is really busy these days promoting the book and she recently left Salesforce to pursue new ideas in social networking and to form a company dedicated to the task. 

Shih is bright and articulate and she’s been involved in social networking and social media for several years.  She even wrote a little code — the first integration of Salesforce and Facebook (Faceforce now Faceconnector).  I caught up with her in an airport as she was leaving to visit family in China.  I wanted to congratulate her on the book and learn about her thinking on some important issues surrounding front office computing and social networking. 

I think we’re in violent agreement on most points and I have to respect the fact that she spent a year researching social media — especially Facebook — and writing her book.  One thing Shih makes clear in the book as well as in conversation is the disruptive nature of social media, “As disruptive as the Internet was for any industry,” she says.  “Who knows who and how will be critical in sales going forward.” 

True enough. 

As the market continues to move from one where innovators sell to early adopters toward one with more stability, we can expect that personal relationships will become increasingly important, that only makes sense.  When early adopters buy something it’s to gain a competitive advantage by being the first to implement a new technology.  Early adopters are like the one eyed man in the land of the blind.  They buy stuff and play with it to find a profitable use.  They don’t need a lot of hand holding and often the most basic documentation is fine so it’s no surprise that selling to early adopters is pretty easy.

Most of us today have lived through a long series of new waves not just in technology but throughout the economy and we have all been early adopters.  The new economy is a lot more about mainstream buyers and many of us might have forgotten (or never learned) how to sell to them.  That’s where social media comes in and it’s why the amalgamation of CRM and social networking is such a big deal — if it gets done right.

What exactly is meant by doing things right is a tricky question.  According to Shih, if you think about a maturity model for the space, “We’re about at phased 1.5.  In phase one people didn’t understand what it (social networking) was or why it mattered.  We’re at the stage now where people know Facebook and Twitter but they don’t necessarily know what to do with them in business.”

Shih makes the analogy to the early Internet when no one knew how to monetize their investments in Web sites.  In a lot of cases companies simply “…tried to apply old models to new media,” it sort of worked but today we’ve moved on in many respects.  Whenever you apply old models to new media you are basically trying to extend the old paradigm, getting the most you can out of it before you have to invest in something new and expensive.  It also gives you time to see which models are most likely to be the winners because no one wants to go down the wrong path and end up spending twice.  Not that that ever happens in the software market.

There is also the issue of developing the right metrics for measuring success and to do that the business objectives need to be in place.  So what are the business objectives and which social networking tools are right for each objective?  “It depends,” Shih says diplomatically.  “There are different tools for different environments,” and her book goes into more detail.  But suffice it to say that a blog has a different purpose and orientation than Twitter with a 140 character limit.

It might seem that several social media are carving out niches for themselves.  Facebook for sales, Linked-in for personal networking and Twitter for quick bursts, Shih is the first to acknowledge that things are very fluid.  “We’re in an exponential growth phase,” she says, “ Everything can change in a year.” 

Right you are.  In a year we could have more clarity or simply more companies contending for hearts and minds (and wallets) as the social networking boom takes over in full force.  If things work out as Shih expects, there will also be a company headed by her to advise companies about social networking and its uses.  WE could all use the help.