Category Archives: Startup

Disruptive Innovation at the Cutting Edge: the Impact Series

Today we have a post by guest author, Benjamin Seifried. An expert and an experienced writer in the field of innovation, Seifried is an editor for PreScouter Journal.

The Impact Series by PreScouter presents a panel of researchers at the cutting edge of innovation discussing the impact of emerging technologies and research and development projects. Moderated by Kelly Gibbs, the panel was filmed at Chicago’s start-up hub 1871, located in downtown Chicago on March 15th.

The series focuses on the power of disruptive innovations and how they are reshaping the competitive landscape. “You’re not going to be able to maintain a sustained competitive advantage with one particular product,” stated Christopher Westland, Professor of Information & Decision Sciences at the University of Illinois in Chicago. Christopher has extensive professional experience in the US as a certified public accountant and as a risk, valuation and technology consultant in the US, Europe, Latin America and Asia.

Scholars discuss the purpose of their research and what drives the motivation to their discoveries. “Ultimately its about what you’re doing for people,” Ashish mentioned when asked how monetization comes into play for an academic. Ashish is the Chief Scientist at PreScouter. He completed his PhD in Chemistry at the Weinberg College of Arts and Sciences at Northwestern University, focusing his research on designing nanoscale architectures, molecular electronics, molecular memory and organic solar materials.

Daniel Eichelsdoerfer agreed with Ashish adding, “It can be dangerous for academics to only focus on monetization…the whole purpose of academia is to generate ideas…” Dan is a Ph.D. candidate in the Chemistry Department at Northwestern University, where he is focusing his research on nano-fabrication with soft and flexible materials. Prior to entering graduate school, Dan was a software developer at Microsoft and a woodland firefighter in Eastern Oregon.

IdeaScale Announces Record 25,000 Customers, Largest Innovation Software Platform in the World

newsflashBerkeley, CA (PRWEB) September 04, 2013 –  IdeaScale, leading cloud-based innovation engine, is pleased to report that it has more than 25,000 current, active customers and 4 million users, making it the largest innovation software platform in the world.

More than 20% of the Fortune 100 companies have been served by IdeaScale’s fully-featured crowdsourcing technology and IdeaScale’s current client roster includes many other notable industry leaders, such as EA Sports, NBC, NASA, Xerox and the Executive Office of the President.

In the last 12 months, IdeaScale has doubled revenue, just as it doubled revenue in 2010, 2011, and 2012. IdeaScale, which launched in 2009, has maintained consistent profitability since its founding. In recent months, Info-Tech recognized IdeaScale as a leading innovator in the innovation management landscape and the Crossover Project awarded IdeaScale the Policy-Making 2.0 Award.

“Our mission is to delight our customers with tools for organization-wide innovation and we’re going to continue to deliver on that mission,” said Rob Hoehn, CEO and founder of IdeaScale. “We believe that innovation can come from anywhere and that belief has fueled our growth so that IdeaScale is never limited by industry, location, or device. We aim to break the record number of users by 2014.”

About IdeaScale:

IdeaScale is the leading innovation software solution for idea management and suggestion box software. The software allows organizations to involve the opinions of their public and private communities by collecting their ideas and giving them a platform to vote. The most important ideas bubble to the top and a community is built around this feedback. For more information about IdeaScale, visit ideascale.com.

3 Lessons: What It Means to be Bootstrapped

webcomic_bootstrapping_cateringA few months ago, IdeaScale launched a short infocomics series about what it means to be bootstrapped, citing a number of different amusing (or sometimes even desirable) inconveniences. And although these illustrations were largely meant in jest, after four years of doing business, we thought it might be important to discuss what we think it really means to be a bootstrapped business. 

Investing in Clients IS Investing in Marketing. To date – our biggest investment as a company is in research and development (40% of our workforce falls into this category). We invite all of our customers to give their feedback (using IdeaScale and our tireless account team as conduits, of course) and ask them what features and services will best serve them. Then we optimize and build for them. We don’t spend half a million on SEO, we spend our money on our members and that’s served us very well.

Responsible Finances. What bootstrapping often means is a level of vigilance and excellence when it comes to financials. After four years of business without taking any venture capital investments, IdeaScale continues to be profitable and double their earnings every year. We do this by rigorously managing to a budget and avoiding any top-heavy, overly-salaried executives.

Freedom to Redefine. IdeaScale has changed a lot since launching in 2009. We had no office… now we have an office with a Tetris arcade game.  We used to be focused primarily on the collection phase of ideation and now we see inspiration through to the conclusion of the idea lifecycle. There is no board of directors or panel of investors governing that evolution – just a family of customers that we communicate with on a regular basis.

IdeaScale is bootstrapped, profitable and is dedicated to maintaining that for the foreseeable future. What do you think it means to be bootstrapped?

From Quirky to the Grommet

cuppowIn the past, we’ve looked at several crowdsourcing product development sites and, overall, I think that IdeaScale is pleased with the entrepreneurial spirit that drives sites like Quirky, but I’ve recently encountered a similar digital entrepreneurial environment that is not only building a new forum for founders, but also a new shopping experience for customers.

I’ve recently been introduced to the Grommet. The Grommet is an online marketplace that launches as-yet undiscovered products, giving them the support they need. But it also sorts and promotes those products a little differently. For example, in addition to the traditional categories of home, appliances, travel, pets, etc. You can also sort by “Made in the USA” or “Social Enterprises” in their personal values section.

This value set is reflected in their process. They make their selections from the crowd by looking for businesses that are truly:

  • innovators
  • with compelling histories
  • and a strong set of values (ex: “ preserving a handcraft, solving a problem in a fresh way, creating jobs in a struggling or developing region, building a social or green enterprise, manufacturing in the USA, or inventing new technologies”)

If you’ve got a Grommet idea, you simply go to the website and fill out this form. It’s an opportunity to share your story (much as the Innovation Awards are a chance to tell your innovation story). And even though the ideas are not selected by the crowd, we believe the crowd they select from is meaningful and the crowd their serving is grateful. And the products are truly hipster-friendly. I mean – to-go sip lids for your mason jars… how many tight-rolled-jeaned friends of ours are shouting “FINALLY!”

What would you like to see next on The Grommet?

Advaiya: Setting Challenges, Shattering Expectations

hqdefaultThis interview is part of a regular IdeaScale spotlight series of our partners. In the past month, you’ve heard from OneLogin and HapYak, but today we are highlighting Advaiya – a digital consultancy that provides strategy consulting, technical and marketing content, training and evangelism, software development, staffing and creative services to clients around the globe. Last month, they hosted an IdeaScale Hackathon where Advaiya team members collaborated to build usable apps on top of IdeaScale technology. We had the opportunity to ask Manish Godha, CEO of Advaiya, some questions and you are invited to read the interview below to learn more.

IdeaScale: Tell me about yourself and your role at Advaiya
Manish Godha: I am a technology enthusiast and have always found the transformational impact that technology and business have on each other to be deeply fascinating. This has spurred the passion – which we share across Advaiya – around solution-oriented technology marketing, the business value of technology, enterprise architecture and technology-led innovation. These are all fundamentally connected aspects, which have always been our focus areas. I am working as the founder and CEO, to continuously provide high value services and products to our customers while continuously building our intellectual assets, viz., our people, partnerships, relationships, IP, capabilities and process maturity. I believe we are uniquely placed to enable organizations to grow and leverage their innovation potential. Our experience with innovation processes, relationship with IdeaScale, technology platform capabilities, and an overall orientation towards innovation make us a very valuable partner to organizations looking at enabling effective innovation.

IS: What is Advaiya and what distinguishes it from other consultancies?
MG: Advaiya is a technology, marketing and business consulting firm working towards our clients’ goals around technology led innovation, consumer experiences, marketing effectiveness and enterprise productivity. Our uniqueness lies in the ability to provide an empowered, managed and enabled combination of skills – technology, business consulting and creative. Our ability to effectively meet our clients’ goals is also derived from our vast experience of working for demanding large companies to highly innovative start-ups. We have had an excellent track record of rapid skilling in emerging technologies, new domains and innovative technology application.

IS: What is the Advaiya Hackathon?
MG: We organized an app Hackathon on Saturday, 27 July, 2013. This was sponsored by IdeaScale. Advaiyans were invited to team-up and develop new innovative apps on the IdeaScale platform. At the very heart, Advaiyans have been technology enthusiasts, and always welcomed opportunity to learn and create something new. This hackathon was aimed at providing a platform to showcase their skills related to innovation, development and creative, and highlight their caliber. With 10 teams participating (33 members in total) in the hackathon, the event saw huge enthusiasm. There was a palpable confluence of great energy, collaboration, patience, agility, and fun. Everyone showed extra-ordinary zeal in competing and turning their innovative ideas to real working apps.  A range of thoughts were shaped to innovative apps including having sentiment analysis on ideas, SMS based submission of ideas, integration of IdeaScale with project management, IdeaScale chrome extension, real-time information visualization, social analytics, etc.  Creativity and technical dexterity were imminently visible. Overall great fun, and great ideas!

IS: How has Advaiya made use of IdeaScale?
MG: Advaiya’s relationship with IdeaScale includes that of a partner, vendor and user. Our innovation practice leverages the powerful platform of IdeaScale to provide solutions to enterprises in this area. We act as resellers and consulting partner to IdeaScale for India market. We have also been working on a few projects around creating a bunch of extensions to IdeaScale particularly on Microsoft SharePoint. And, we have also been using IdeaScale internally to gather and discuss ideas around our key investment areas. Thus we have ongoing campaigns to gather what can be done to enhance our intellectual assets – people capabilities, or operating infrastructure and processes, for example. We have collected, discussed, and executed on many ideas including what marketing activities we should be doing and how we can better organize trainings. Advaiya also contributes to “Advantage Udaipur,” a program which highlights and facilitates innovative businesses in Udaipur and we have setup a public community on IdeaScale for this as well. We are collecting, discussing and, as ideas gain currency, involving the appropriate institutions to further them.

IS: How does Advaiya prioritize innovation in its solutions?
MG: Innovation has been one of the important pillars of our positioning and differentiation. We have been able to be innovative internally – build innovative solutions, add capabilities, engage in new conversations etc. – and been helping our clients with innovation projects. Our cultural orientation has been towards what we call, ‘something new and different’. We have worked for Microsoft, for example, to build new use cases around emerging technologies. We even created innovation management solutions covering the aspects of collection, prioritization, and execution. At all times, it has been largely informal and ingrained in how we approach any initiative. People come together, discuss ideas, and we naturally favor ‘something new and different’. But, we have also realized that we need to be a little more organized to be able to fully leverage these innovation tendencies. We have put in place internal tools and programs, like IdeaScale, social, hackathons, scheduled idea talks, etc. We are banking on IdeaScale platform to not just accelerate innovation at company level but also to drive innovation into our customer engagements, and solution initiatives.

IS: Any advice for companies looking to crowdsource?
MG: Three key factors: participation, recognition and execution. I do not believe that crowdsourcing would lead to great ideas immediately – it leads to great innovation by building a culture of innovation. What this means is overall and widespread recognition of need and empowerment to innovate, ability to build on each others’ thoughts, innate appreciation of business drivers and imperatives, and trust in the system. It is obvious thus it is critical to market the crowdsourcing initiatives across to community to gain attention and to engage. Recognition mechanisms within crowdsourcing platform (say, IdeaScale) have to be augmented with organizational and social activities like rewards, executive participation, inclusion in performance management processes and so on. And, most of all, if the crowdsourced ideas are not acted upon, the overall initiative will dither away. Visible execution with, possibly, participation of the contributors is vital.

To learn more about Advaiya, visit their website.
For more information on the IdeaScale partner program, click here.

Do You Hate Fun and Bangin’? Don’t Read this Post.

bwfmobileIn a unique opportunity, IdeaScale had the chance to interview the mystery CEOs of the much-talked-about, upstart start-up Bang with Friends whose mobile application went live last week.

In case you missed it, Bang with Friends is an application that allows you to discretely select people from your Facebook friends list who you would bang with (or hang with). No one knows that they’ve been chosen until that friend chooses you back and you both simultaneously receive a notification. The rest, as they say, is up to you.

The CEOs’ saucy attitude continues to come across in their answers to our interview questions that remain as frank and unphased by the nature of their product (as you’d expect). They may have been criticized and praised for their new product, but whatever they might say, we think BWF is here to stay.

IS: Do you think of BWF as dressed-down crowdsourcing (pick as many bangs as possible in hopes of the right one)? Is BWF just crowdsourcing a bang?

BWF: That’s perhaps the most interesting description of the “shotgun approach” strategy some people utilize.  Fortunately, it’s not real crowdsourcing on the bangs (so the crowd doesn’t get to choose who you bang)!

IS: Do you think it’s more likely that users will get laid using your tool than using “old fashioned” 1-1 methods?

BWF: Absolutely!  We recommend a healthy dose of existing strategies plus using Bang With Friends to help uncover those friends-with-benefits opportunities!

IS: Have any relationships formed as a result of BWF hook-ups?

BWF: Hell yes!  We’ve heard from lots of people who ended up forming relationships beyond just friends-with-benefits arrangements.  The best relationships are where your partner is a good friend as well.  Mix in some great sex and you have a recipe for success.

IS: What should a user’s motto be on Bang with Friends? “Looking for the right bang” or “always be banging”?

BWF: We’ll let our users decide what fits them best.  Bang With Friends is about cutting through the BS, and that includes not telling our users what they should be looking for.

IS: Is there anyone who shouldn’t bang with friends?

BWF: People who hate fun and banging?  Oh, and we restrict users to ages 18 and up, so anyone who doesn’t meet that requirement.

IS: What does your mom think of Bang with Friends?

BWF: My parents took a bit to process it, but are ultimately very supportive.  After all, I got here somehow!

IS: What’s the question that you’re shocked no one has asked you yet?

BWF: Who was the most bangin’ reporter to interview you?

IS: Who was the most bangin’ reporter to interview you?

BWF: You, of course! 😉

Looking forward to seeing what’s next in the Bang with Friends universe. Curious to learn more? You can check out the app here.

Introducing IVAN: Crowdsourced Environmental Issue Tracking

7825968422_e651ff8c56_oIt happens rather frequently, I’ll be driving through a spray of pesticide or I’ll notice a car that is chugging black smoke behind it down the highway.  It’s a terrible blight on my experience, but also on the environment and what makes me so annoying to be around is that there’s generally nothing to do but roll my eyes and begin complaining to whoever is nearest to me.

Now: with IVAN’s technology that is live in Imperial Valley, Coachella, Kern County, and Fresno in California, there are several things that I can do with that information. I can text, email, call, or upload information that is disruptive and environmentally unsound to this environmental mapping service that pinpoints specific complaints so that others can review and respond to that information. You can follow-up and find out what’s being done about the issue that you’ve reported or volunteer to become a member of a task force that takes responsible for cleaning up.

It’s a rather empowering set-up that IVAN is offering to local communities. IVAN is the Imperial Visions Action Network whose functionality includes: real-time mapping, detailed reports, user alerts, and support to implementers.

Most interestingly, IVAN is based on the same technology that developed Ushahidi. Ushahidi has been providing open source, information collection for a variety of purposes (including reports of ethnic violence that relate to particular neighborhoods, disaster reporting, and more). It’s great that it continues to be used towards purposes that are generally geared towards making the world a better place.

What other purposes could Ushahidi be applied to? What sorts of environmental problems do you see in your community?

Meet CrowdCare

crowdcareTechnology is of an age where not only have digital devices penetrated a great deal of the population, but the expectation is that they will perform perfectly all the time. I have seen people absolutely break down when their GPS isn’t functioning properly (incapable of planning a cross-town trip), because they are so used to it functioning well and the meltdown is an unrivaled act of entitlement.

Setting aside what this means about us as consumers, what it means for brands is that they can’t afford to ignore the needs of their consumers, but achieving nuanced information about the tiniest details of an app or device is oftentimes difficult, because it is so hard to make everyone expert.

CrowdCare presents an alternative, because the crowd is often the best expert within reach. The method is simple: data is collected from consumers and devices (with great accuracy) and that data is applied towards answering consumer questions. Subscribers don’t have to do anything to share their information and overall support costs are reduced.

A nice differentiator for the CrowdCare offering (as compared to similar solutions) is that it has some nice privacy features (all information gathering is fully disclosed to the customer, information can be masked, and the information collected per device can be customized). And all of this happens within the app.

Sign up for more information by joining their Twitter or Facebook communities.

How would you apply CrowdCare? Why do you think we have such high expectations for technology?

Power Outage – Recap #fisherplazafire

As many of you are aware we had a day long outage on Friday. I wanted to give everyone a sense of what happened, what we are doing etc.

On Friday (July 3rd) – there was a fire in Fisher Plaza. Fisher Plaza is a “Communication Hub” in the NorthWest – its host to a bunch of datacenters as well as TV and Radio Stations. The fire caused the automatic sprinker system to kick in and essentially shut down power to one of the buildings.

3:00 AM

We learned about this around 3AM Friday morning. All QuestionPro technical staff were online assessing the situation by about 5AM. Since this was a system wide outage (as opposed to a group of servers failing) – we simply had to asses the situation as it developed.

6:00 AM

We get preliminary indication that the root cause of the power failure is the fire and that no-one is allowed to enter/leave the building till Seattle Fire Department does a sweep. At this point we are all online, waiting for Seattle Fire to clear and give the thumbs up. We redirected traffic to QuestionPro.com to a temporary set of servers with a downtime notice. We asked users to check out our twitter feed for updates as well as our status page (status.surveyanalytics.com)

9:00AM

We get indication that Fisher Electrical contractor is trying to get power back online – drying out the equipment to make sure its safe to operate. We start putting updates on the QuestionPro and IdeaScale twiiter accounts (twitter.com/questionpro and twitter.com/ideascale) – both QP and IS are hosted in the same set of cabinets. The entire building is out of power and its a challenge even to get in and out of the building (no elevators, electronic key cards don’t work etc.)

We also make the determination that we should wait till about 5PM to see of the power comes back online before moving all the data to another data-center. We also have space in a backup data-center.

12:00PM
Fisher and Internap communicate that they are bringing in mobile generators in Flat Bed Trucks – the plan is to get the Generators fired up and bypass the electrical room altogether (where the water damage was)


5:00PM
Engineers are still working on bypassing the electrical room. We decide to wait for a couple of more hours. There are a lot of other issues with moving all the data into the backup data-center – re-configuring the systems would take us a longer time and we run the risk of not having enough servers to handle to load. Our backup systems are meant to store backups (not run the entire load and applications.)

10:00PM
Power is restored to HVAC (heating and cooling) equipment. Power is then slowly turned on to all the customer (our) equipment.

3:00AM
Power comes back online – Our servers start humming – All QuestionPro technical staff is online by 5AM – We start working on making sure all services come back online properly. – By about 6:45AM we are all back to normal.

Twitter – Works like a charm:
We tried to keep everyone abreast of issues as they developed on twitter. We were issuing updates and following updates using the following hashtags – #fisherfire and #fisherplazafire. If anyone every doubted the uselfullness of Twitter in an emergency – this has proven (to me at least) first hand that Twitter indeed is amazingly useful to communicate in the face of an emergency.

Through twitter we found out that we were not the only ones affected by this fire – Some of the other sites that went offline are:

  • authorize.net
  • bing.com/travel (farecast)
  • bigfishgames
  • Bartell Drugs
  • allrecepies.com

Needless to say, this is pretty big disruption of our services. Both Fisher Plaza and Internap have promised us that they’ll come up with a detailed explanation of the issues and steps to prevent such outages in the future. Meanwhile this also exposed a couple of vulenerabilities on our own preparedness. In the spirit of openness I’ll talk about them – and not only will we talk about it, we’ll also do something about it – and keep you posted on progress.

We will be posting a series of blog posts with the hashtag #fisherplazfire to communicate effectively the steps we are taking to make sure this kind of a distuption does not happen in the future. Like with any system, we cannot make things 100% – but we sure as hell can try.

Short Term Issues:

Communication:
One of the shortcomings we noticed was that our Blog (which is our primary medium of communication) was also hosted within our data-center. This has to change — we;ll be moving our blog (blog.questionpro.com) to a hosted WordPress – Rob Hoehn is in charge of that and will oversee that. We’ll also take this opportunity to segment our blogging – we’ll setup three separate blogs (one for QuestionPro, IdeaScale and MicroPoll.)

Automated Phone Message:
We should be able to deliver the same information (like twitter updates) when people call up. We use Angel.com for our hosted PBX system – We’ll setup the system so we can give out updates when users call in in times of emergencies like this.

Pre-Planned Error Page:
We should have a system in place to switch our systems to an error page (when all hell has broken loose) – we had to scramble at the last minute to setup a separate system (in our backup data-center) to host the error page itself.

Long Term Issues:

Real-Time Data-Center Redundancy:
We have full redundancy _within_ the data-center. So if any one of our servers dies (hard drive failure, etc.) – other servers pick up the slack automatically. If one of our database-servers crash, we have replicated servers that will come online automatically within seconds. However, if the entire data-center goes offline, our current plan does not have a solution to move to another data-center within minutes. We have full copies of the data stored offsite – but that is only the data.

What we need to get to, is to _operate_ out of a different data-center in case of a massive emergency like this. This will undoubtedly will double our operating expenses, but given then business we are in, we simply need to do this. Over the next three months, we’ll be figuring out a solution so that we can sustain turning off power to our primary data-center and things move to our backup data-center.

Finally, I want to acknowledge the patience some of you have shown and understanding many of our customers have shown in the face of this emergency. As the CEO and an Owner of this business I do not take this lightly.

If there is something I can do for you, please feel free to ping me directly – vivek[dot]bhaskaran[at]surveyanalytics[dot]com

On-Premise Installation Vs. Hosted Solutions.

Every so often we (still) get some sales inquiries about from potential customers who want to install a survey tool/solution on their own servers. Back in 2003 we used to get a lot more inquiries like these. In fact back in the day, users were even developing their own survey engine from scratch. Today we get about one or two a week.

I’ve been in the IT/Software business for some time now. Even before starting QuestionPro, I was a technology consultant for a few startups mostly in SF and Seattle during the dot-com boom and then did some work for larger shops like Washingon Mutual during the dot-com bust here in Seattle 😉 So, I do have a good grasp on what the actual costs of a in-house application development/installation/maintenance is.

For the most part (thanks to Google, Salesforce, GotoMeeting, etc.) most people really have understood the value and real cost differential between the TCO (total cost of ownership) between hosted solutions (On-Demand/ASP) and on-premise installed software. For example, see this blog post by by Peter Yared about using only hosted solutions for his new company :

Quote from the Peter’s Blog:

Back in 2003, we still had to buy our own servers and hire IT people to
get some basic services. This mindset prevailed into 2007, where to
upgrade our Wiki into something much more functional, I learned that IT
had physically installed two iterations of wikis on our servers. It was
beyond me what features we would get from our own installation vs. a
hosted one, so I suggested a policy of only using hosted infrastructure
moving forwards. This led to a suggestion of having some meetings to
discuss the concept, which in my experience means “not going to
happen.” 🙂

Starting with a clean slate at wdgtbldr, there is
definitely an “everything must be hosted” policy, and I am amazed at
how cheaply and easily all of the functions of a small business can be
set up and shared between employees. There are no servers, no VPN to
get to the servers, no software to install, configure, and maintain,
and definitely no part time IT people. Everything works as advertised,
since it is not our installation of Bugzilla/wiki/etc. that has to be
maintained, rather proven infrastructure shared by many other companies.


We also understand your concerns about going with a hosted model for your survey software solution. They typically revolve around data ownership, portability and flexibility. What you also need to consider is some of the issues that are now obvious and apparent like server OS patching (especially if you are in Windows), monitoring and redundancy.

Here are a few points to consider when making a build vs. buy decision on survey software that we’ve collated over the years. These apply not just to survey software, but to any SAS (Software as a Service) purchase decision:

  • Core Value Add — Support and maintenance of software cannot be a core value add nor should it be for a market research firm or a company who’s core business is not collecting data. All the market leaders in the industry know this and have adopted the simple model of keeping only their core business in house.
  • Staying Competitive —  If you decide to maintain the software in house, you will put yourself behind your competitors, as your company will incur an additional cost/risk associated with maintenance of software. Software is one of those things where the maintenance to capital ratio is very high. For example, if you compare this to the Auto business, you buy a car for about 30K, and you spend about 3K/Year (gas, oil changes, break pads etc.) to keep the car running. If you buy a software (on-premise install) for about 30K, it’ll cost you about 10K to keep that running. 30% maintenance fees is very typical and minimum. In fact in many cases the operational costs actually surpass the capital expenditure via. costs like server installation fees, product upgrades, bandwidth provisioning etc.
  • Quicker ROI — From an initial ROI perspective, hosted solutions shorten time-to-value by eliminating software implementation and cost issues. You focus on collecting your data, refining your processes, and defining your business goals. Not worrying about how Microsoft Vista SP1 patch will affect your installation, or how the next virus threat may affect your connectivity.
  • Total-cost-of-ownership. Users of hosted software solutions need not ever implement software upgrades, pay for maintenance, or add hardware. The net effect is to keep total cost of ownership in check. More along the lines of “hidden” costs. If you spend $49/Month on Salesforce or $15/Month on QuestionPro you have a clear understanding on what the total cost is. In on-premise installations, the total costs can never be nailed down. Server hard drive failure can cause outages that may involve one of your engineers to go to the data-center to replace a failed hard drive. These costs are ad-hoc and can only be estimated at best.
  • Security Team — Most SaaS vendors have infrastructure devoted entirely to staying up to date with the latest software/hardware security issues. Its our job to keep your data secure – if it wasn’t we wouldn’t be in business. We can do this efficiently because our upgrades/changes affect all our customers — we are essentially distributing the costs across all our customers — Economies of scale.
  • Data Portability — This is obviously a key issue. What if the company that you rely on for your core business stops servicing you, or goes out of business. In almost all SaaS solutions, there is usually ways of getting your data out of the system (locally) as a backup measure. Companies like Salesforce, QuestionPro, Netsuite, ConstantContact, etc. all offer up the ability to download data in a standard Excel/CSV /XML format. These output models serve as a good backup measure just in case things go south. There are however issues around system portability. For example, data from Salesforce cannot be simply taken out and put into Netsuite, or data from ConstantContact cannot be ported to VerticalResponse. This would involve setting data structure standards and everyone adhering to them — Not realistic in the near future.

Now, in many cases a SaaS solution may not be right for some companies. Typically we used  to think that larger (Fortune 500) companies go with in-house/on-premise installations simply because they could afford it. With Web 2.0, what we are now seeing is that even for larger companies, it’s not a question of cost, but time-to-market is becoming a bigger factor. This is the driving force behind the Enterprise 2.0 model. For example, with a hosted solution you can get whatever you want done in a few days. A few days for an internal IT team to put a solution in place is simply not possible. It takes about 2/3 months just to order a set of servers and have it installed in the data-center, configured and patched. We know about this first hand — We have to do this too!

I know there are hard circumstances and directives (“thou shall not use hosted software”) that many companies have, and most likely there are some reasons why such policies were put in place. What I would question is _when_ was this policy put in place — In 2000? or 2008? Many times we get into conversations, especially with companies in Govt., Healthcare and Banking/Financial — which are heavily regulated industries about compliance and issues surrounding privacy, data protection and risk mitigation etc. They are all valid issues and concerns, but lets analyze them. If the issues are not technical, then most the compliance issues are legal directives. For example HIPPA (HealthCare) certification does have anything to do with real technology. Many legal and complianc
e issues can be simply handled with a customized SLA (Service Level Agreement)  — An SLA that is specific and addresses concerns surround data storage, uptime, privacy and confidentiality.

The fact is SLA’s is much easier to negotiate than hosting and running your own servers and services. SLA’s are a one-time cost.We’ve had custom SLA’s and agreements with many companies in regulated industries like heathcare and banking. Custom SLA’s provide an easier mechanism for enterprises to have hosting agreements that capture all the core needs of uptime, availability and regulatory compliance while maintaining the flexibility and cost savings on a hosted platform.

It is also not uncommon for companies to conduct stringent (both technical and financial) due-diligence on service providers. We’ve gone through these a few times now and almost expect this from large companies now. I recently had a chat with one of our clients — Tim O’Conner who is the Senior VP Marketing & Strategic Sourcing for Unisource (a 4 billion dollar company) — and he said in no unequivocal terms the benefits of a hosting solution — Not only in terms of cost savings (about 5-10x cheaper) but more importantly in terms of time-to-market. With a hosted solution (especially self-service) he is in total control of the execution parameters and can get solutions out of the door as and when he wants.