On the road (again)

Colorado Springs is an interesting place.  Despite the name there are no “springs” it’s an arid place in a valley surrounded by the southern Rocky Mountains and Pikes Peak National Park (for sticklers Pikes really should be Pike’s but the official U.S. naming convention eliminates the apostrophe).  The springs were an invention of the railroads seeking to establish a destination for vacationers.  Good idea, it’s a nice place.

You can ride horseback through the mountains and see abandoned mines and homesteads as well as some rugged natural beauty.  Last time I was there we rode on some trails that were barely wide enough to accommodate our horses.  On one side there was forest and on the other a steep drop off.  RightNow convenes its annual user group meeting at the Broadmoor Hotel in Colorado Springs next week.  By most accounts it’s been a good year for software, especially SaaS vendors so the meeting should be upbeat.

Other commitments will keep me from attending the RightNow Summit but I look forward to hearing about their announcements.  In general there is an unmistakable move in most areas of CRM, contact centers included, to move more operations to an on-demand footing.  Whether it’s called SaaS, managed or hosted, the call center is moving to simpler surroundings — at least for the client organization, and for good reasons.

Owning and operating a call center is a big and expensive undertaking for a company.  With all phases of the operation in-house, a company has to be able to support multiple subject matter experts from hardware to applications.  The company also has the task of managing an impressive (some would say bewildering) array of gear both telephonic and computer.  The same company also has all of the headaches of recruiting, training and managing a sophisticated workforce.

So, when a vendor comes along offering to take even a portion of that big job over for a fixed price per seat, it draws a lot of attention.  In the not too distant past, the number of vendors willing to make such an offer was limited and RightNow was at the top of the heap.  The market is changing making it easier for vendors to get into the business and the fact that we are even talking about the difference between on-demand, managed and SaaS solutions is evidence of that change.

But it’s not just changing technology that is driving the market.  The core customers, you and me, are smarter and more experienced and we are beginning to draw less from our vendors’ call centers.  Since we’ve all experienced earlier generations of products we are more likely to solve simpler problems with new products ourselves.  Moreover, our recently acquired sophistication with social media makes us more adventurous when it comes to seeking out service and advice from our peers.

It was no surprise to me that RightNow acquired social networking company HiveLive to bolster its efforts in social service offerings.  I look forward to hearing what RightNow CEO Greg Gianforte has to say about his company’s direction in socialized service and support.  Should be an interesting conference.

Also on the docket, the following week Sage Software hosts its user meeting in Atlanta followed by Microsoft holding an analyst briefing in Redmond.  I wish I could make all of these events but they are simply too close together.

Sage is always surprising in part because the company’s business model — selling exclusively through the indirect channel — puts different demands on its products and services.  That has frequently meant that the company has held back on major innovations until its partners were ready to get on board.  But last year, the company announced a 2010 strategy to bring its multiple CRM products under an umbrella that will enable it to achieve greater economies of scale and better integration capabilities with its back office solutions.

Also, Sage recently announced a foray into another on-demand style solution to be delivered early next year.  Their original SageCRM.com notwithstanding, this will be something new for SalesLogix, their high end product.  This is CEO Sue Swenson’s second year at the helm and it was clear at the partner meeting in May that she’s putting her imprint on the company.  She’s tasked senior executives with ambitious plans to update key products and improve partner-facing programs.  It will be interesting to see what end user facing changes are in the offing.

Finally, Microsoft is a very important player in the front and back office applications markets today.  Their analyst meeting in the same week as the Sage user meeting should generate a few headlines and I am eager to hear more about their direction though I will not be able to be there.

All this activity makes me optimistic about next year, and if all this isn’t enough, Intel, AMD and IBM have all reported better than expected financial results for the recently finished quarter.  The semiconductor market has always been a reliable indicator of an upturn in the tech sector and I am hopeful that these results are the first signs of a general economic rebound.  But recovery means more than simply reporting better financial results especially if the increase is from a depressed level caused by recession.  It’s clearly a half full glass but that’s fine with me.

Fusion applications decide an argument, sort of

With Oracle’s announcement of Fusion applications, you can make a reasonable case that Salesforce.com has won an important ten-year old argument about the future of the software industry.  Notwithstanding SAP, the only significant outlier left, Oracle is the last major software company to adopt on-demand computing as a centerpiece thus awarding legitimacy and critical mass once and for all to the idea.

Amen.

But the Oracle announcement says more about business models than technology paradigms and at the model level it is not clear that Salesforce has won.  Salesforce CEO Marc Benioff’s vision of business applications delivered over the internet has won an important victory but the business model — subscription services — that makes this technology the center of the movement and exclusive delivery mechanism has not eliminated all competition.  Not yet, at any rate.

The reasons are simple enough, market reticence generated by concerns — both real and imaginary — about security or the viability of the technology model still hamper full adoption of the business model.  As a result, companies as diverse as Oracle, Microsoft and Sage have hedged their bets by offering technology that can be implemented in numerous ways including on-demand as well as by conventional deployments.  As a result vendors have effectively thrown the business model decision over the wall to the customer.

With software capable of, shall we say, polymorphous deployment, the ultimate decision about how to deploy now becomes the exclusive province of the customer as the vendors have now turned into Solomon or, in a modern interpretation, Burger King.  Customers are completely free to have it their way or ways.  They can deploy business applications in a fully SaaS configuration or in hybrid ways that are to a lesser extent owned and operated by the IT department.  As I have noted before, this is typical transition state behavior of vendors straddling two diverse paradigms.

It is no surprise that adoption of the business model lags adoption of the technology.  It has always been true that conversion from traditional software licensing to SaaS is a big step and one that for many software companies could lead to financial ruin if not handled expertly.  More to the point, there are customers who, for reasons of security, custom and preference believe that SaaS computing is not for them, at least not now.

So it is no surprise therefore that the most successful SaaS companies are those that, like Salesforce, grew organically from on-demand roots.  Other successful SaaS companies like Oracle bought their way into SaaS computing, a time honored tradition when adopting new models.

Even before Oracle’s Fusion announcement at Open World this month, the company had been a player in SaaS based CRM with Oracle CRM On-Demand due to its earlier acquisition of Siebel Systems.  But it remains to be seen if any software vendor can fully realize the benefits of SaaS — and now Cloud Computing without full emersion into the technology model.

One of the most powerful aspects of SaaS computing is not the idea of subscriptions or even Internet delivery but of a single version of the applications supporting all users.  With a single version of the code, all users have the same foundation on which to configure, modify and build new applications.  The single code set — also called multi-tenant architecture — makes it hugely unlikely that any two independent software makers would develop incompatible applications and therein lays the power of the business model.

This single idea makes it highly likely that applications built to the standards of the foundation — or platform as we like to call it — will be able to inter-operate.  Take this standard away and you have the same Babel of competing standards and proprietary designs that have been the bain of the software industry.  There is a cost associated with this lack of standardization and software customers have been paying it for decades — with rising resentment.

That cost is not measured strictly monetarily; there is opportunity cost involved too.  When everyone played by the same conventional software rules the opportunity cost problem was equivalent to a farmer experiencing bad weather.  But SaaS computing eliminates the weather variable giving a big advantage to companies under its umbrella.  So it is ironic that the decision about adoption is still left to taste.

With most of the hybrid products, the same code can be deployed in a conventional multi-tenant way or as a standalone system behind a traditional firewall.  The segregated system becomes a unique instance the moment a developer modifies the platform.  Doing that makes the idea of standards a waste of time.

But for the time being — and I am still calling it a transition state — we can expect to see a lot of deployments in which the software is SaaS ready but the deployment is decidedly twentieth century.  In the next five to ten years we will see examples of companies trying to back out of their proprietary SaaS-like systems to finally get on board with SaaS or Cloud Computing.  It will all have been avoidable and it will be good business for software consultants.

As Kurt would say, “So it goes.”

Fall line-up (in addition to Baseball)

I am looking forward to the fall user group meeting season.  Name a company and they’re having an event for customers and/or analysts.  I can easily count Salesforce, Oracle, Sage, RightNow, SAP and Microsoft having events before then end of the year and there are many smaller companies hosting them too.  Personal commitments are preventing me from going to all of them but nonetheless the frequent flier miles will add up.

I heard a delicious rumor that Marc Benioff will be speaking at Oracle Open World.  In fact, it’s more than a rumor but I will believe it when I see it.  Of course, Benioff at Open World makes perfect sense, it’s as natural as HP being there but I know what you’re thinking.  Why?

I think it’s a great example of that old word, “co-opetition”.  On some levels you compete and on some levels there might be a vendor-client relationship.  For example, Salesforce uses the Oracle database heavily and is one of a small group of  companies on the planet that gives Oracle a heavy duty workout.  No disrespect to others, but Salesforce occupies a unique place for while other companies might have more users in, say, an e-commerce setting, Salesforce operates a very different paradigm that we all know is becoming the center of the IT universe.

I am looking for big things from all the majors — announcements that I hope will propel our industry and the economy as a whole as we gear up to get out of this recession.

• Oracle has to deliver on some of the promises made during its acquisition phase a few years ago.
• Salesforce can easily announce some new initiatives in CRM and Cloud Computing.
• Sage announced recently an initiative in cloud computing and I am looking forward to details.
• RightNow made a play for HiveLive thus getting into social CRM and they’ll no doubt have more to say late in October.
• SAP has been quiet lately so it would be a natural for them to break out with an announcement in December in Boston.
• Finally, Microsoft is having an annual analyst event in November and I expect them to keep up the momentum of recent CRM announcements.
• On the next tier several companies are also planning smaller events and it will be interesting to see what they do too.

The smoke signals suggest an industry that is planning an early breakout from the recession.  I wish them luck and hope their timing is on target.

Netbook or Ultralight? Premise or SaaS? Paper or Plastic?

Microsoft CEO, Steve Ballmer told analysts recently that ultra-thin PCs will be the answer to the growing popularity of netbooks.  I doubt that but I can certainly understand Ballmer’s interest in backing the ultra-thins and this obviously has implications for larger issues like Cloud Computing.

By now, the sides have been clearly marked out in the debate about on-demand vs. on-premise.  One side says everything will go to the cloud the other manages to carve out a plausible scenario wherein conventional computing continues into the indefinite future.  I have a third view, namely that we are in a transition state between a past that was all about licenses and premise-based computing and a future that will be all or mostly in the cloud.  But that future could still easily be a decade away.

In a recent piece I wrote about how revenues for the on-premise vendors still look good.  Some of the biggest premise-based suite vendors continue to score impressive deals and even in a recession they show revenue gains or at least show that they are keeping up with the prior year.  That’s all good, but when do you know you are on the down side of the curve and that the new paradigm will eventually win out?

There are many answers and a stubborn realization that most people faced with decline or at least paradigm shift, refuse to believe it or do much to avert the inevitable.  I think there’s some of that going on in Redmond with regard to netbooks.

Netbooks, I should say, are small computers that don’t do much on their own.  They have small screens and small disks, smaller processors and memory — just enough to get their users to the Web where they can access applications and data stored there.  Netbook computers represent a new style of computing that harmonizes nicely with cloud computing.

Netbook owners use these appliances for a purpose such as email and other office tasks as well as accessing cloud-based applications.  Tien Tzuo CEO of Zuora told me recently that he runs his whole company from the cloud.  They use Google Apps for office productivity tools, Salesforce.com for CRM and their own cloud based billing system to send our bills and receive payments.  There might be some premise based accounting applications in the mix but the point is that Zuora is a cloud computing company in many senses of the word.  Tzuo’s story is interesting to me because he still uses a conventional computer — a MacBook Pro and not a netbook.

I think Microsoft has misunderstood the market.  Microsoft’s approach with ultra-thin devices coming to market later this year is to provide high-end processing power in a lightweight package that travels well.  There’s nothing wrong with that, I am certain there is a market for this kind of device.  But these devices will replace older, heavier laptops, not netbooks.  Promoting ultra-thins as netbook alternatives says a lot about Microsoft as a company worried about losing its franchises in Windows and desktop applications like Office to stripped down operating systems like Google Chrome (if and when it sees the light of day) and Google Apps.  It is also a serious misunderstanding of the market.

A new market is opening up that is situated between conventional computing and handheld devices like BlackBerries and iPhones.  The new market represents a computing paradigm shift.  Whenever paradigms shift, you can bet the establishment paradigm will do what it can to extend itself and kick a little sand into the face of the new guy.  Ultra-thins as netbook beaters strike me as this kind of paradigm extension.

At the same time, Microsoft is positioning itself to profit from a cloud paradigm.  The company is beginning to offer SaaS versions of its CRM, ERP and Office solutions, for example.  But even if these offerings are eventually successful, there will be a significant adverse impact on this company’s top and bottom lines because monthly service fees are inevitably smaller than one-time licenses.  That’s what makes paradigm shifting so difficult.

Wall Street has expectations about public company revenues.  Changing a business model with the result that revenues dip — even if the change has long-term positive implications — is not well tolerated.  Microsoft has done a great job over many years at delighting Wall Street and central to that record is the company’s portfolio strategy of innovating in multiple directions at once.  So while the CEO talks about ultra-thins as netbook beaters, the company is also building a cloud infrastructure.

But this time could be different.  Regardless of the product mix, Cloud Computing will cost less and unless that swells the market significantly it’s hard to see how revenues will not dip.  It’s hard to construct a scenario in which Microsoft doesn’t thrive but as consumers it’s important to keep a bigger picture of the whole market in mind.

Agita

Microsoft’s difficulties with delivering software continue.  Internet Explorer version 8 (IE8) is the latest example.  An article on ZDNet today said the company plans to ship a patch to users.  I have to say that the company has usually taken a pro-customer and pro-CRM approach to dealing with customer problems.

Last week I downloaded an update to MS Office for the Mac (version 12.20) only to discover that it would not open any of the new file formats like .pptx.  I found that incredible — their proprietary format and they can’t open it!  I had been working on a presentation in .pptx for several weeks and it was due the day the upgrade failed.

Not to worry, I tried to down-rev the update by going back to an automatic back-up I keep on my Time Machine.  If you don’t know what a Time Machine is, you should.  In that one device there is a routere and a large server grade disk.  The Time Machine does automatic back-ups while I work with negligible overhead.

I had never used the Time Machine for a restore before and didn’t know how to do the restore.  I called Microsoft and got several pieces of good news.  First, the support call was free because it involved a known problem that was Microsoft’s fault.  Second, the people in the call center are Mac experts and my agent was able to walk me through the process.

That’s great as far as I am concerned.  What started as a great deal of agita for me ended with real satisfaction.  Nonetheless, it would be very nice if Microsoft could get out of the graceful recovery business and back into the business of making bulletproof software products.

Commoditization

Dan Jenkins, a venerable writer for Sports Illustrated and author of many novels about sport (he wrote Semi-tough, for example), coined one of my all time favorite Texas-isms.  It was a beautiful way of describing something just bordering on impossible.  In one of his books a character says that something is “Tougher than rent and alimony.”  I have long ago lost the context but even today rent and alimony are my acid test of true difficulty.

I never thought it would be possible to exceed rent and alimony for their sheer descriptive power and I believe that time will bear me out.  But to that nifty phrase, I feel compelled to add another idea because it is my observation that there is nothing more difficult than watching a product line commoditize knowing full well that your company must change while being totally unable to.  If nothing else, rent and alimony wins on brevity.

If change was easy in business, then everyone would be doing it but the fact is that it is a Herculean task.  Why else would so many major software companies watch as on-demand technology got better and better while doing nothing or next to nothing to embrace the new delivery model?

I suspect that making the technical argument for change is the easy part of the equation and the hardest part is dealing with shareholders.  As shareholders — and we are all shareholders — we play an interesting game of self-deception.  We intuitively know when change is needed but, nonetheless, we also know that often times, stock in a public company would crater if the market determined that a company’s business model was to suddenly change so that it would make less on purpose.

Far better to let the air out of the balloon in a slow deflation than in a burst.  In a deflation we all play a game of false hope, maybe the balloon will magically re-inflate, maybe we can break even and get our money back — maybe, baby.  In reality it is a one-way trip to exhaustion.  Rather than taking the decisive steps needed to save the company, albeit as a reduced revenue machine, we persevere tinkering with the old products and old business model hoping to forestall the inevitable.  More nimble competitors nibble at our undersides.

There are any number of examples today of companies or even whole industries that could greatly benefit from changing business models despite the negative potential for their share prices.  The first is the newspaper industry.  We are at a silly point in the evolution of news delivery where papers are owned by large corporations that seem to want to protect their business models more than their businesses.

Newspaper readership is in decline in America (though not elsewhere) and parent corporations are nonetheless loath to do anything to change the model of printing the news.  They give away their content on the Web afraid of charging for it despite the evidence that doing so can be profitable (the Wall Street Journal) and that recent surveys show readers are more than willing to pay for content delivered electronically.

I hear the loudest analysts say that electronic content delivery would not replace the revenues from print, but I hear very little about cost reductions in labor, transportation and printing.  There is a solution to this, which is to simply wait until the print news business further deteriorates.  Then some of the largest newspaper corporations might qualify for a federal bailout or the further reduced projected revenues of dying business might balance out with the prospects of the new paradigm.  Conversion would then become a “no-brainer” with no irony intended.

The second example is the software industry and I fear that the American software industry — the jewel in our high-tech crown — might go the way of newspapers.  For despite the fact that we have wonderful examples of forward looking companies like Salesforce.com, NetSuite, RightNow, Google, Facebook and hundreds of others crafting the software paradigm of the twenty-first century we still have too many conventional software companies watching their stock prices.

The conventional companies are big and form the backbone of global computing.  They have names like Oracle, SAP and Microsoft and while some are making good efforts to convert their business models, the tasks are great and some have barely started.  Kudos to Oracle and Microsoft for increasingly offering SaaS solutions.  You can debate whether their solutions go far enough or if they are simply extending the old paradigm but they are making progress.

Microsoft worries me at the operating system and office automation products levels though.  Google’s announcement that it was building a stripped-down operating system that gives small computers just enough functionality to get to the Internet is brilliant though it remains to be seen whether they can deliver.  Microsoft now finds itself on the other side of an equation from its position as the disrupter of mainframe markets.  In the 1980’s we were told that nothing had the power to stop mainframe computing but somehow client-server networks took over.

At risk is Microsoft’s deep penetration in desktop operating systems and office products.  Google has a plan to deliver it all over the Internet — free — which could be a big problem for Redmond.  Of course Google has to deliver but the sheer number of vendors in the SaaS space means that even if Google fails in the attempt, there will be other challengers.  It’s not impossible, but it is rather hard to beat free, so what does Microsoft do?  Wait for the threat to materialize or take action?

The standard playbook says stand pat but as playbooks go it has a disastrous track record.  Time, as they say at Apple, to think different.

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.

Paradigms shift

I spent some time with Microsoft the other day.  I was invited to one of their technology centers in the Boston area to participate as a judge in an event that brought together entrepreneurs and developers to prototype applications using Microsoft products.  I was on a panel consisting of several venture capitalists and me.  The object was to give people some real world feedback on their ideas.

Microsoft is trying to position their CRM product as an ideal platform for application development and they use the moniker XRM to signify applications that can be based on that platform.  It makes a lot of sense to me.  CRM is, at its heart, a comprehensive database for all things customer related and building on top of that should get you a lot of new application ideas.  After all, this is what Salesforce.com has been doing for a long time with each successive iteration of its development environment.

I have to say though, that I was not impressed with any of the application prototypes that I saw.  Without giving away the store, the applications had several shortcomings in common that I think are serious.

First, there was no non-Microsoft content involved.  No application had the semi-bright idea of mashing up some data from another application on the Web from, say, a social networking site or even a mapping provider.  The applications we saw that day were all conventional database applications built on top of a conventional database.

Second, there was little reliance on SaaS computing even though Microsoft Dynamics CRM makes this possible.  Some vendors said they’d go that route but I’d say most focused on the old tied and true licensing model.  You might say there’s nothing wrong with that and you could be right.  But what made me skeptical was that in the business planning part of the competition, multiple vendors were telling us they needed many hundreds of thousands of dollars just to buy hardware.  Didn’t they do their homework enough to know how to avoid that expensive approach?

Now, don’t get me wrong, everyone buys hardware, for example, Oracle just bought Sun for good reasons.  It’s necessary.  But in a startup environment where every penny of expense has to be scrutinized, it seemed perverse to see an entrepreneur proposing to spend 30% to 40% of their capital on gear.  It didn’t and doesn’t make a lot of sense to me.

The whole experience left me with the impression that Microsoft is becoming the General Motors of the tech world.  I know that might sound cruel or arrogant but I haven’t seen the kind of thought leadership from Microsoft in many years that would give me confidence that they are still major innovators.  Moreover, the company seems addicted to a business model that is ending.

To be fair, some of that alliance with the business model is most likely an artifact of their go-to-market strategy.  They sell a lot through resellers who make a living on the margins and on the added value of their services implementing, customizing and training.  That’s a relatively high cost model and I don’t think it goes well in a world that, as Thomas Friedman famously described it, will be hot, flat and crowded.

Given the recession and the tectonic shifts going on in the software industry, it does not seem to me that Microsoft is preparing very well for the next iteration of this industry.  That world will rely on personal interactions made possible by social networking.  It will require lower costs to reach the large population of potential users who don’t live in first world countries.  And the technology will have to be dead solid idiot-proof.

So far in its long life, Microsoft has done well with a portfolio strategy in which it invests in multiple ideas until one catches fire and then it goes all in.  These days I can’t tell what’s in the portfolio though it seems like a lot of the wrong stuff.

I hope I am wrong.  I hope they surprise me and invent the next great thing in our business.  But so far all I see is a giant in a defensive position.

Old and new trade shows

Two of the biggest names in CRM had trade shows recently.  Oracle and Microsoft each held customer conventions in the same week but the two could not have been more different.  Microsoft attracted thousands of customers, partners, employees and press to New Orleans for Convergence, one of their big annual events.  In a departure from convention, Oracle held a day-long exposition promoting its front and back office solutions on the Internet.

Each show was well planned and offered attendees much information, networking opportunities and chances to interact with knowledgeable people from the vendor organizations.  One of the big differences between the two shows is the ultimate costs measured as time and money to put the events on including transportation and lodging and entertainment for anyone attending.  

I am not going to say that one way was better than another but I will suggest that one approach might be a bit more tuned to the times and customer centric, even if it is in a counter intuitive way.

While on-line trade shows have been around for a few years, with companies like On24 and Unisfair offering applications to support them, Oracle’s use of this mode really brings it home to CRM.  Consider the advantages.

If you are trying to rein in costs, and who isn’t these days, a virtual trade show gives you the opportunity to interact with a vendor and to get the information you need without incurring the high costs of travel.  If you are a vendor, you save on renting the hall and transporting people and equipment as well as set up and the travel and entertainment costs of doing a show.  On the other hand, if you think green the idea of not transporting ten thousand or so of your closest friends saves a great deal on a company’s carbon footprint.

With everyone concerned about costs and carbon, the idea of a virtual tradeshow as one weapon in the marketing arsenal makes even more sense.  The real question, of course, is not whether to convert everything to the virtual mode; it is more about what balance to strive for.  Historically, nearly all shows have been the live variety and because they were so expensive, the marketing calendar was partly built around them.  But in a world where virtual shows become common, I think the absolute number of shows will increase mostly due to the new capabilities. 

Rather than trying to cram every possible idea and session into the live event it will be easy to build specialized events that can be generated when the need arises.  One of the problems with some of the more esoteric sessions that happen at shows is that the national or international convention is the only time when a vendor might be able to get a critical mass of people and thus make the session worth putting on.  But a Web based session by definition reaches everywhere (with the exception of North Korea and some parts of China, but you know what I mean) and so it could be cost effective to put on any time.

The net effect of more on-line shows could be greater interaction and greater innovation.  Of course there are other ways to bring a community of interest together but so far communities have been more about capturing customer input and feedback, not about proselytizing.  Perhaps this means that virtual tradeshows will become a kind of community and the technology that supports them a part of community suites.  You don’t know.

Whatever the outcome, Oracle’s recent use of a virtual trade show is a great example of the kind of innovation possible when some of our entrenched beliefs are challenged by economic realities.  Often the technology has been available and vendors have been working with early adopters to find the right niche.  Then a disruption happens and the niche opens up.

In the last recession, web conferencing came into its own.  Prior to that, meetings were face-to-face and as an analyst the vast majority of my briefings were in that mode.  Today, it is a rarity when I have a meeting to take a briefing.  This recession could do for trade shows what the last recession did for briefings.

Of course, the recession is not the only factor and I expect that energy costs will increase significantly once economic activity picks up again.  In that situation, and with a new administration intent on managing carbon output, virtual tradeshows will find another niche.

The conventional tradeshow is not in danger of disappearing, but a new paradigm has emerged that puts a new twist on it.  People will still visit New Orleans for shows, but virtualization may make it a little easier to get a reservation at Arno’s.

NOTE: I went to a user group meeting last week in South Beach sponsored by Varolii, a company specializing in outbound customer communications to influence customer behavior.  It was held at the Ritz-Carlton, a short walk from the beach.  Let me just say that the bright sun and guava cheesecake convinced me that the above argument is not, shall we say, airtight.

Oracle struts its creative chops with virtual trade show

Oracle did a cool thing today.  They held an on-line trade show called Applications Unlimited Experts Live.  The company leveraged On24’s virtual trade show technology to make it all work.  As luck would have it I have recently interviewed a user of a competing trade show product for another project so I was able to get an understanding of what’s involved.

You might think that because the event is on-line that it’s easy to put one together but the same amount of planning and the same or greater amount of content has to be prepared for these events.  The real payoff is that it’s a lot easier to get people to a virtual event—it’s less expensive and far greener.

One complaint, attending the event required a robust set of software for viewing and listening and although Oracle had instructions for PC’s and Mac’s, I think the PC instructions worked better (I hope), I finally got everything configured and downloaded and heard Ed Abbo’s keynote.

The interface and the virtual venue were fine and you could, if you wanted, chat or otherwise communicate with people.  As an analyst there wasn’t a lot of new content for me but that isn’t the point, I get briefings all the time.  What impressed me about Oracle’s on-line trade show was how well it was put together and how it operated.

There are many ways to demonstrate thought leadership in a recession and show that you are engaged with your customers, this was novel and quite good.  The virtual conference saved a lot of money and ensured that customers with real interest would not be precluded from attending because budgets are tight.  While that might look like great customer intimacy (and it is) it is also great operational effectiveness because it made Oracle look like a company that is easy to do business with.  In a recession operational effectiveness is a great weapon that far too few companies use.

It also stole some thunder from Microsoft’s Convergence, a flesh and blood trade show happening this week in New Orleans.  Think about the contrast!