Dell World—The Big Picture

For the past few years, many pundits have derided Dell as a one-trick pony. Sure, it totally disrupted the PC and then server markets with its direct model, and redefined operational efficiency in the hardware industry. But could it ever hope to compete in higher value, higher margin software and services businesses?

With Michael Dell back at the helm, the vendor began publicly charting its path to the virtual era in 2010 (see my March 2010 post Dell 2.0: Top Takeaways from Dell’s Virtual Era Event) and has been executing on this strategy via both organic growth and strategic acquisitions. Most of these acquisitions (Perot Systems as the exception) have been smaller companies with innovative products and high-growth rates.

To make the Virtual Era vision a reality, Dell has been executing on four key and inter-related objectives:

• Moving from product to a solutions orientation. In the past, Dell’s identity has revolved around boxes—from PCs to servers to Streaks to big screen TVs. While Dell vociferously reiterated its ongoing commitment to the PC, it put the spotlight on its growing ability to provide businesses with end-to-end, heterogeneous solutions, not just piece parts—and to satisfy market demand for better, more cost-effective and easier to deploy, use and manage IT solutions.

• Building out its cloud-cloud-cloud plan (my phrase). The shift to cloud computing—public, private and hybrid—features prominently in Dell’s solution equation. Dell’s sales team has been using Salesforce.com for a few years now, and is also a major user of Chatter and Radian6. Dell has become a cloud convert, and figures plenty of other companies will want to make this move too. Dell has invested $1 billion dollars to build and buy a cloud computing portfolio to help customers take advantage of cloud computing. Dell’s portfolio includes public cloud, private cloud and service solutions (such as Boomi, which I’ll get to in a minute!) so customers can move to the cloud and still leverage their existing IT investments. In Michael Dell’s words, Dell wants to “give them the bridge to the past and a path to the future.” One example is the new enhancements Dell has made to its Virtual Integrated System (VIS) Architecture, which helps extend virtualization benefits within a customers’ existing infrastructure.

• Transforming from snubbing the channel to become a channel-friendly vendor. In the past, Dell’s most unique characteristic was its successful direct sales model. But, while that works fine for selling hardware, it won’t allow Dell to move up the solutions stack. Dell has recognized the important role that local partners play in creating value-added solutions that work with customers’ existing investments. It has been actively seeking partners that add solution value, and will have over 100,000 by the end of October.

• Pioneering in social media. Dell has been breaking ground in using social media for input, dialogue and interactive marketing. After getting badly burned in the Dell Hell support crisis in 2005, Dell licked its wounds and has moved on to become a leader in building extensive social media capabilities to help it tune into customers and become a social media poster child. Dell just keeps raising the bar in social media, as evidenced by its Social Media Command Center.

Dell Boomi—A  Microcosm of the Virtual Era

Dell’s latest release of Boomi highlights Dell’s execution on its Virtual Era strategy.  Boomi, which Dell acquired in 2010, is an 11-year old integration company that has been steadily moving to expand its cloud integration services. Boomi’s cloud integration service helps companies more efficiently and affordably integrate cloud and on-premise applications—across different locations, networks, clouds and companies (see Dell and Boomi: Doubling Down on Integration for more details).

Boomi’s approach features a cloud-based integration hub that provides customers with integration as an online service. With Boomi, companies can integrate different cloud and on-premise applications across geographically dispersed locations. Boomi’s visual interface relieves customers from complex code-writing and scripting.

With this release, Boomi has added several new capabilities that correspond directly to Dell’s broader overall Virtual Era vision, as shown in Figure 1.

Figure 1: Boomi Fall 2011 Release and How it Highlights Dell’s Virtual Era Themes

Source: SMB Group 2011 (click image to enlarge)

Quick Take

Dell is moving beyond its direct, hardware-centric comfort zone and making good progress on its Virtual Era strategy, as exemplified by Boomi. Serendipitously for Dell, HP has been pre-occupied with and increasingly defined by PC unit flip-flopping and a game of CEO musical chairs. HP’s diversions not only help boost Dell’s current client and server opportunities, but also give Dell more running room to move ahead with its long-term strategy.

While some out there may still view Dell as one-trick pony, I see ample evidence that Dell is well positioned to succeed in its next race.

In conjunction with IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them.  This is the first in the series, and was based on a couple recent experiences of Brent Leary of CRM Essentials. The last example is really Brent’s dad’s experience using his iPad – which is the one that really brings it all home…so to speak.

I recently bought a new video camera—a Panasonic AG-HMC150. This was a pretty significant purchase for me because it represents a step up into the semi-pro leagues, as I’m planning to do some documentary style programs. I kicked off my buying process with two things: a question and a search.

I posed a question to my friends first. A few people I know do this professionally, so they were my first stop. And because I posed my question to them on Facebook and Twitter using a couple of hash tags, I received their valuable feedback along with great information from people I’m connected to but didn’t know were knowledgeable about video production. On top of that, I received even more valuable information from people I wasn’t connected to, but who saw my question due to the hash tags I used. So within a matter of minutes, I had a great deal of information to sift through to help me with my big buying decision.

While the feedback was pouring in from my social network, I also took to Google to find product information on video cameras. I found links to review sites, informative blog posts and videos comparing the various aspects of cameras to help me with my decision. I went to manufacturer sites to get specs, and followed that up with trips to CNET for in-depth reviews. All this was topped off by finding a few great online communities created by enthusiasts who are passionate about video production, and in some cases about specific cameras—like the Panasonic AG-HMC150 community on Vimeo.

Within a few days, I went from not knowing what to get, to feeling very confident in selecting the right camera for my needs. I also found a community of knowledgeable, experienced people who I could learn from and collaborate with to help me not only with my buying decision, but also with my video production activities. Once I decided which camera to buy, I used the web to find the right place to buy it. My newfound community recommended a company based on their previous interactions with it.

While this is just my personal experience, individual examples like mine are being replicated all over the web as social, cloud and mobile technologies help connect us to the people and information we need in order to find solutions when we need them. It’s what is driving hundreds of millions of people to spend a growing amount of time on Facebook, Twitter and other social networks. With these social networks becoming collaborative platforms, and with smart mobile devices providing access from anywhere, we can build and extend relationships to people and information in ways that truly improve how we experience life.

One thing I love to experience every year is watching college basketball’s national tournament, also known as March Madness. I’m not alone, as this is annually one of the highest rated television events of the year. But this year I was even more into the tournament than ever before.

For the first time, every game was shown on one of four television networks. But the big reason I had a much better tournament experience had to do with the free apps for both the iPad and iPhone that streamed all games live—giving me a choice of seeing any game from wherever I happened to be.

Not only did the mobile apps make it possible to stream any game, they also made it possible to keep track of brackets, share information with my Facebook and Twitter friends, and participate in ongoing tournament conversations. The Social Arena, available through mobile apps and multiple websites, provided me with a non-stop flow of tournament information, including insights from on-air personalities like Charles Barkley. The Social Bracket allowed me to vote on who I thought would win each game, but it also tallied up all the votes to see how the overall viewing community picked the games. Finally, the NCAA and Turner Broadcasting hired people to use social media monitoring tools to analyze the chatter taking place around the tournament, in order to provide insights into what was driving conversations.

Now even if I didn’t have the social and mobile apps, I would have been watching the tournament. But because I love all my mobile devices as much as I love watching the games, I experienced March Madness in a way I couldn’t possibly have done in years past. And, as you might have guessed, I’m not the only one who likes both basketball and mobile devices, as you can see from the numbers below:

• March Madness On Demand (MMOD) was the #1 free app for both the iPhone and iPad in the App Store during the first two days of availability.
• 36% of all streams were from the iPad and iPhone apps the first weekend of the tournament.
• The mobile apps averaged 683,000 daily unique users.
• An average of 67.5 minutes per daily unique visitor was spent streaming MMOD on broadband.
• The NCAA.com/MMOD broadband site averaged 3.8 million daily unique visitors.

Turner was able to leverage our love of social/mobile tools to provide viewers with a whole new level of engagement with the tournament. And, as Fast Company magazine stated in an article about the project, Turner is fit to deliver “a true revolution in sports. And in return they’ll get audience data, captivity and flexibility like no sports broadcasting has ever seen before.” As a side note, television ratings were the best they’ve been in 15 years.

It is clear today that people depend heavily on social networks and mobile technology. Now, more people have accounts on social networks than they have email accounts, and mobile device sales are poised to surpass combined desktop/laptop sales within the next year in the United States. Google+, a network only a couple of months old, already has more than 25 million users sharing over 1 billion pieces of content daily. The ease of content creation and distribution has led us into the age of the zettabyte (with 21 zeroes after the “1”)—which is the amount of information estimated to be available to us online today.

It’s not just the younger generations that are heavily dependent on these technologies. Baby Boomers, and people from earlier generations, are also adopting these tools. I know this from firsthand experience, watching my soon-to-be 80-year-old father using his iPad to do things he had never done before on his desktop computer. He reads books, listens to NPR, watches videos and shares information with his siblings on Facebook—and even Twitter. He uses Bank of America’s app to do his banking. He shops on Amazon.com and Apple’s App Store. He even mentioned reading a few of my blog posts, something I can’t remember him doing before.

Quite honestly, my father loves his iPad because it allows him to easily do so much more. And these tools enable today’s customer to do and experience more than imagined just a few short years ago. But, the fact that customers are smarter today has more to do with having better technology at their disposal than being brainier. Customers have always wanted more information and access to the right people. They have always wanted to be listened to, and have their ideas incorporated into developing better products and services. They’ve also wanted to be valued beyond the financial transaction that they bring to a company’s bottom line.

And now, because technology has empowered them to get together, share experiences and amplify their collective voice, customers expect companies to engage them with these new tools and communication channels. As customers leverage social and mobile technologies to improve their knowledge and life experiences, they will look to build relationships with businesses that will do the same. Well, at least my father and I will.

This is the first of a six-part blog series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. In our next post, we’ll look at key points businesses need to consider to best serve the smarter customer. In the meantime, we’d love to hear how you’re using the web, mobile and social technologies to become a smarter customer.

The Sage North America Branding Challenge

Over the years, Sage North America has added a myriad of SMB-oriented accounting, ERP, CRM, HR, payments and industry-specific solutions to it’s portfolio. In most cases, these solutions brought large groups of loyal customers with them. Sage has undergone many identity-building initiatives in the past, including co-branding all of it’s individual solutions with the Sage master brand in 2009, developing capabilities to seamlessly integrate Sage CRM, ERP, HR and other applications, and a concerted corporate-wide initiative to make customer experience it’s top priority. But, for the most part, Sage customers have continued to identify more with their individual brands, ala Abra or MAS, instead of the Sage moniker.

This has not only hampered Sage’s traditional cross-selling efforts, but it also threatens Sage’s Connected Services strategy, which provides Sage customers with online, connected services (both from Sage and Sage partners) that integrate with on-premise Sage solutions to provide additional functionality.

Clearly, for Connected Services to achieve it’s goals, Sage needs to make sure that, for instance, Sage Integrated Payments Solutions are the first stop for Peachtree or ACCPAC customers looking for payments solutions that integrate with their accounting software.  In addition, without a strong corporate brand, Sage is at a disadvantage when going up against competitors such as Intuit, Microsoft or SAP.

Tackling the Branding Dilemma Head-On

Houillon wasted no time addressing the elephant in the room. At the opening keynote of the partner session, his first announcement was that Sage NA would embark on a phased approach to drop individual product brand names (again, think ACT!, MAS, Peachtree, etc.) in favor of the Sage brand. So for instance, Sage Peachtree Pro, Complete, Premium and Quantum would become Sage 50 Pro, Complete, Premium and Quantum.

Note the word “phased.” This re-branding won’t happen overnight, but take place over the next 12 to 18 months. Sage has lots of products and in many cases, product overlaps. It will most likely start with entry-level solutions, such as Peachtree and ACT!, and those products that have a well-defined space within the Sage line-up.

As important, along with the re-branding, Sage will ramp up existing efforts to create a more consistent user interface and experience among its products, and make it easier to integrate them. For instance, Sage will be incorporating Sage Advisor (first available in Peachtree), which provides in-product assistance to help guide users through tasks, resolve error messages and find functionality as needed, into more of its products.

Needless to say, all of this re-branding talk caused quite a stir among partners, press and analysts. In many cases, partners have invested a lot of passion in an individual brand–in many cases, partners had been selling the individual brand long before Sage acquired it. They have legitimate concerns about making the brand switch, and the new investments they’ll have to make in marketing collateral, web sites, etc. However, in subsequent sessions, Tom Miller, Sage NA’s channel chief, noted several programs already underway at Sage to help ease partners through the transition.

We (press and analysts) also raised a lot of questions about the risk of eroding brand equity that they’ve built up over the years for the individual brands. Several analysts also worried about the blandness of using a numbering system for product names (as noted in both Denis Pombriant’s and Paul Greenberg’s posts on the topic)–which I’m not crazy about either. And of course, there’s the problem that some products overlap with others–such MAS and ACCPAC.

But, after listening to the Q&As and debates, querying Sage execs one-on-one, and talking to Sage customers (most of whom told me they had no problem with rebranding), I think Houillon has made the right decision.

Short-term Pain, Long Term Gain

No doubt that Houillon’s decision will produce some short-term pain, probably most acutely felt by channel partners. But what’s the alternative? Former CEO Sue Swenson stepped in to stop the bleeding, but major surgery is still necessary for Sage to make a full recovery. In the long run, Sage needs to reset, refocus and re-energize the company for growth–something it hasn’t seen much of recently, for these key reasons:

1. Although all Sage execs appear on board with the change, I’m sure that there are at least a few that have resisted the corporate call. This is just human nature–either inertia, the fact that an individual brand is doing fine as is, or that some people like to run their own little empire without a lot of corporate oversight. The rebranding and what’s underneath it–common look, feel and experience–should help shake out execs that are idling, and foster a more innovative and collaborative environment.  Ultimately, this should yield more value for customers and partners.
2. A strong corporate brand is key to the success of Sage Connected Services.  Connected Services enable existing Sage customer to easily tap into add-on online services that give them additional functionality. Sage has about 50 connected services already available and coming soon, spanning HR, payments, payroll, tax, sales and marketing functions. For example, Sage offers a dozen Sage Payments Solutions as connected services to Sage ERP and accounting solutions, and several sales and marketing connected services for Sage CRM solutions, such an e-marketing service, as well as business information services via Hoover’s. But, if customers don’t self-identify as Sage customers, they may not even look at Sage Connected Services when needs arise.
3. Sage needs a strong corporate brand to help its cloud offerings take off. Sage already offers SageCRM.com, ACCPAC Online, SalesLogix Cloud, Sage Payments Solutions and Sage Intergy on Demand (for healthcare) and Sage Billing Boss as cloud solutions, and several more are on the way. As more companies look to the cloud to deploy new solutions, on demand offerings will increasingly erode the sales of packaged software. Sage needs a strong brand to compete in this space and capture new customers as they turn to the cloud.

Or, as Benjamin Franklin said, “When you’re finished changing, you’re finished.”

What Sage Must Do to Pull It Off

That said, Sage will face many challenges along the way. Here’s my take on what Sage must do to increase the odds that it will be successful:

1. Facilitate the branding change for partners. The biggest concern I heard partners voice was about the money and time they would need to spend to accomplish re-branding. Sage needs to make it fast, easy and low- or no-cost for partners to re-brand their web sites, marketing collateral, etc. at every step of the re-branding process. Given Sage’s history of providing partners with innovative tools and programs, I’m confident that it will be able to develop and roll out do the same here.
   
2. Put more emphasis and resources to make sure that changes beyond product name changes are achieved. Develop and provide Sage employees, partners, customers, press and analysts with a clear vision and solid plan for what the Sage portfolio of the future will look like. Sage has already made good inroads on integration across product lines, and needs to continue investing here. But other areas are fuzzy. For instance, when and how will it bring a common interface to different solutions?  What’s the roadmap to roll out Sage Advisor technology into different solutions? In cases where there is product overlap, how will it rationalize this?
   
3. Make the Sage brand stand for something and stand out. Simply using the Sage name to brand all of its products won’t be enough to get new customers in the door. What can the Sage brand represent? IMHO, Sage should piggyback on the Firm of the Future education it’s offering partners. This workshop helps partners analyze their existing business models, understand and navigate change, and build a plan to create a new business model to succeed in a changing world.  Why not take this a step further and help its SMB customers become Firms of the Future? In almost every industry, SMBs are grappling with changes wrought by a global economy, increasing volatility and new technology. Everyone sees the change coming, but few even know where to start to get ahead of the curve and position to capitalize on it.

No one ever said change is easy. But change is inevitable and for Sage, essential if it is to thrive and grow. Sage has taken a big first step is in the right direction, now it just needs to keep moving ahead.

In a nutshell, SAP Business One is designed from the ground up to meet the needs of small businesses and departments and divisions of large businesses. Geared to organizations with limited or no IT resources, SAP Business One offers a unified business management solution that integrates core business functions, including financials, sales, customer relationship management, inventory, and operations. Also included are embedded analytics, ad hoc queries, and standard reports, and integration with SAP Crystal Reports software. Because SAP Business One is built as a unified solution, it can help small businesses get the synergy they need across different business functions, streamline processes, and cut down on redundant data entry and errors.

SAP offers the solution in 40 countries and 25 languages—providing coverage that few other small business ERP vendors can rival. SAP Business One also boasts about 550 add-on solutions, many of which provide industry-specific functionality.

Business One is a packaged solution that customers can run on-premise, but is also available in hosted and hosted subscription offerings. It has a very small footprint, which enables smaller companies to run the solution on a laptop instead of a server. Business One customers are typically up and running in 2 to 8 weeks. Available via SAP Business One partners, pricing (including software license and implementation) typically starts at about $20,000 for five users.

To expand awareness and extend its market reach, SAP introduced the SAP Business One Starter Package in May. The starter package offers a fast, affordable, low-risk on ramp even for very small businesses. It includes pre-configured administration, financials, sales, purchasing, and inventory processes and implementation services for up to 5 users. Pricing starts at under $2,000 U.S., and companies go live in 3 to 10 days. When and if you need to add more users or functionality, you can upgrade to the standard edition of SAP Business One, without having to migrate data, learn a new application or re-train users.

Despite its small size, SAP Business One can also take advantage of sophisticated technology that can provide businesses with a competitive edge. For instance, I was surprised to learn that SAP has Business One running directly on HANA, SAP’s column-based, in-memory database, in its labs. HANA enables applications to zip through calculations for millions of records in just fractions of a second. According to SAP, this is valuable even for companies that don’t have to crunch through huge volumes of data. For example, in-memory technology will also improve the performance of the application. Though not yet ready for prime time, SAP plans to introduce Business One In-Memory Database with the release of the 9.x family, slated for early 2012.

Small businesses have very diverse needs and constraints, and Business One won’t fit the bill for every small business. However, small businesses that want a flexible, capable integrated, on-premise business suite may be pleasantly surprised to learn about–and investigate–what SAP Business One has to offer.

–by Sanjeev Aggarwal and Laurie McCabe, SMB Group

At its annual Metamorphosis conference earlier this month, Pervasive announced Pervasive Galaxy, which merges an online integration marketplace and community into a single, streamlined platform. Pervasive has designed Galaxy to remove boundaries between buyers and sellers and make it easier for end-user customers to understand options, review vendors, figure out what’s best for their needs, and shop for/purchase integration solutions. Galaxy’s built-in community capabilities help vendors connect with customers to gain input, gather feedback, exchange ideas and help crowdsource new solutions.

As we noted in our SMB Group Top Ten 2011 SMB Predictions, better, faster integration is becoming a critical business solutions differentiator. Cloud computing has made business solutions more accessible and affordable for a wider swath of companies, but integrating them can break the bank. This is especially the case for SMBs, who usually don’t have the money or appetite for complex or time-consuming integrations.

This reality drove Pervasive, a long-time leader in the integration space, to send Galaxy into orbit on the heels of some very big players making significant acquisitions in the integration space; IBM’s purchase of Cast Iron earlier this year, and Dell’s recent deal for Boomi.

Here’s a quick synopsis of the announcement, and our take on what it means for the integration market and the stakeholders in it.

The Integration Challenge

Integration is one of the biggest and costliest hurdles for companies that need to adopt new applications. Companies need to integrate applications and data sources to maximize productivity, reduce redundancy and inaccuracies, and streamline workflows. Yet integration between and among external cloud and on-premise applications, different data sources and existing business workflows can be costly and complicated. This is particularly true for SMBs, who lack IT staff that can develop integration between applications, or the budgets for solutions that require time and labor services.

How Galaxy Addresses the Integration Challenge

With Galaxy, Pervasive is creating a place where customers can easily identify and access affordable and capable integration solutions and vendors, and also provide vendors with feedback about their integration requirements. Galaxy will offer data integration products, solutions, connectors, plug-ins and templates, and serve as a community platform for customers, developers, integrators and other relevant vendors. Pervasive’s intent is that this convergence will nurture a strong ecosystem which will facilitate more rapid, innovative and accessible integration solutions.

Vendors on Galaxy will offer customers both integration components and turnkey cloud integration services. For instance, integration components available in Galaxy include engines, workflows, connectors, agents and rich data services that can support a range of needs, such as data loading, data matching, profiling, transformation and business analytics. Galaxy will also offer ready to run solutions for point-to-point solution integration in a subscription-based SaaS model.

How Galaxy Works for Customers

Galaxy enables community participants to build, preview, test and buy integration solutions. These might include pre-built data integration solutions, connectors, plug-ins or templates that enable faster integration solution development.

Instead of starting with a Google search, or contacting a VAR or consultant and trying to figure out if there is an existing integration solution that’s right for their needs, customers can go to Galaxy and see if there’s an existing solution that fits the bill. They can also use Galaxy to locate a partner than can customize an available integration to their individual needs, or build a custom solution from scratch.

Building an integration community is Galaxy’s other primary focal point. End users will not only be able to shop for ready-made solutions on Galaxy, but will also be able to view and rate templates, connectors, plug-ins and solutions. They can also use Galaxy to inform developers and integrators about their needs, request new integrations, and link to others with similar needs to share the costs of getting a new integration developed. End-users who build integrations themselves can, if they want, also sell them to others via the Galaxy platform.

How Galaxy Works for Partners

Pervasive Galaxy offers developer and system integrator (SI) partners an integration marketplace platform, development tools, store, community collaboration and revenue sharing–basically everything they need to build and sell their solutions. There is no charge to build integrations. Once partners build the solution and start selling it on Galaxy, they keep 70% of the sale and the other 30% goes to Pervasive. Partners retain their intellectual property, and can offer documentation and the required technical support (possibly for an additional fee).

Galaxy should help developers get their integrations to market more quickly, and make their offerings more accessible to a broader constituency. For instance, Galaxy’s “try and buy” program gives developers a way to demonstrate ROI before they commit to a purchase–giving skittish and/or cash-strapped SMBs a risk-free way to try the integration and see if it pays off before they have to spend money for it.

In addition, partners can take advantage of Galaxy’s community to tap into integration requirements across a range of businesses. This should enable them to tune their integration solutions more closely to actual requirements, to explore potential new markets for their products and meet customer needs in a more repeatable and profitable manner.

What Does Galaxy Do for Pervasive?

Galaxy gives Pervasive a centralized mechanism to market and provide access to its growing array of development and testing tools–including Pervasive Data Integrator, Pervasive DataCloud, Pervasive Data Profiler in a more streamlined way to developers and integrators–and build a new revenue stream based on the sales of the integrations that partners build and sell.

Pervasive has initiated, built and will maintain and manage the Galaxy marketplace platform. As the Galaxy community grows, Pervasive should also be able to extract a lot of insight about customer and partner integration requirements and demands across different horizontal, vertical and geographic markets, which it can use in its own product planning efforts. Pervasive and its community members will jointly develop and participate in demand generation and building visibility for the Galaxy market, vendors and community.

At some point, Galaxy could serve as a launch pad for integration testing and certification, conducted either by Pervasive or by the community, helping to reinforce the company’s position as a leader in the integration space.

Quick Take

The integration challenge is becoming increasingly more complex because of trends such as cloud computing, mobile solutions, social media and the exponential growth of data. These trends will continue to drive the need for companies to integrate more applications and data from an increasingly dizzying array of sources.

These trends are also driving Pervasive and its integration competitors to tear down some of the barriers that have made integration so difficult in the past (see Dell and Boomi: Doubling Down on Integration, for our view on Dell’s approach to this challenge).

With Galaxy, Pervasive has built a streamlined, in-context ecosystem for customers to search for, identify, evaluate and purchase integration solutions. As important, Galaxy gives users a place where they can voice their integration experiences, concerns and requirements. Meanwhile, Galaxy should help partners market their solutions, and gain insight on integration gaps and requirements from a much broader audience, and amortize the costs of developing their integrations over a larger number of customers. The ecosystem approach puts vendors and customers on the same page and fosters the collaboration that should result in a win/win for all involved.

However, while Pervasive has built Galaxy, the question remains whether enough users and partners will come to make it a true integration destination point. To fuel customer interest, Galaxy needs a strong cadre of actively engaged developers, SIs and integrations in the Galaxy ecosystem. Conversely, to attract partners, it needs a lot of customers that partners can sell their services to. Pervasive will need to double down on its social media, marketing, partner engagement and other related activities to ensure Galaxy reaches its goals–especially as it faces strong competition from the big guys–in our opinion, particularly from Dell-Boomi, which appears to be thriving under the Dell umbrella.

But, Pervasive’s smaller, independent status can also play in its favor, as noted in Top Takeaways from Pervasive’s 2010 IntegratioNext Conference. The company can keep a laser-like focus on the integration needs of customers and the business development needs of partners. And its independent status may appeal to prospective partners that may having differing agendas than or encounter red-tape challenges when working with Pervasive’s larger rivals. If Pervasive can use this agility and focus to its full advantage, and rev up marketing and social media engagements, Galaxy should succeed in it mission to create a vibrant integration marketplace.

Pervasive announced Pervasive Galaxy at its annual Metamorphosis conference earlier this month. Galaxy merges an online integration marketplace and community into a single, streamlined platform. Pervasive has designed Galaxy to make remove boundaries between buyers and sellers and make it easier for end-user customers to understand options, review vendors, figure out what’s best for their needs, and shop for and purchase integration solutions. Galaxy’s built-in community capabilities help vendors connect with customers to gain input, gather feedback, exchange ideas and help crowdsource new solutions.

As we noted in our SMB Group Top Ten 2011 SMB Predictions, better, faster integration is becoming a critical business solutions differentiator. Cloud computing has made business solutions more accessible and affordable for a wider swath of companies, but integrating them can often break the bank. This is especially the case for SMBs, who usually don’t have the money or appetite for complex or time-consuming integrations.

This reality drove IBM to acquire Cast Iron earlier this year, and Dell’s recent purchase of Boomi. Now Pervasive, a long-time leader in the integration space, has sent Galaxy into orbit on the heels of some very big players making significant acquisitions in the integration space.

Here’s a quick synopsis of the announcement, and our take on what it means for the integration market and the stakeholders in it.

The Integration Challenge

Integration is one of the biggest and costly hurdles for companies that need to adopt new applications. Companies need to integrate applications and data sources to maximize productivity, reduce redundancy and inaccuracies, and streamline workflows. Yet integration between and among cloud and on-premise applications, different data sources and existing business workflows can be costly and complicated. This is especially true for SMBs, who don’t have IT staff that can develop integration between applications, or the budgets for solutions that require time and labor services.

How Galaxy Addresses the Integration Challenge

With Galaxy, Pervasive is creating a place where customers can easily identify and access affordable and capable integration solutions and vendors, and also provide vendors with feedback about their integration requirements. Galaxy will offer data integration products, solutions, connectors, plug-ins and templates, and serve as a community platform for customers, developers, integrators and other relevant vendors. Pervasive’s intent is that this convergence will nurture a strong ecosystem that will facilitate more rapid, innovative and accessible integration solutions.

Vendors on Galaxy will offer customers both integration components and turnkey cloud integration services. For instance, integration components available in Galaxy include engines, workflows, connectors, agents and rich data services that can support a range of needs, such as data loading, data matching, profiling, transformation and business analytics. It will also offer ready to run solutions for point-to-point solution integration in a subscription-based SaaS model.

How Galaxy Works for Customers

Galaxy enables community participants to build, preview and test, buy integration solutions. These might include pre-built data integration solutions, connectors, plug-ins or templates that enable faster integration solution development.

Instead of starting with a Google search, or contacting a VAR or consultant, and trying to figure out if there is an existing integration solution that’s right for their needs, customers can go to Galaxy and see if there’s an existing solution that fits the bill. They can also use Galaxy to locate a partner than can customize an available integration to their individual needs, or build a custom solution from scratch.

Building an integration community is Galaxy’s other primary focal point. End users will not only be able to shop for ready-made solutions on Galaxy, but will also be able to view and provide ratings on the templates, connectors, plug-ins and solutions in it. They can use Galaxy to inform developers and integrators about their needs, request new integrations, and link to others with similar needs to share the costs of getting a new integration developed. End-users who build integrations themselves can, if they want, also sell them to others via the Galaxy platform.

How Galaxy Works for Partners

Pervasive Galaxy offers developer and system integrator (SI) partners an integration marketplace platform, development tools, integration store, community collaboration and revenue sharing–basically everything they need to build and sell their integration solutions. There is no charge to build an integration on Galaxy. Once partners build the solution and start selling it on the platform, they keep 70% of the sale and the other 30% goes to Pervasive. Partners retain the intellectual property of the integration, and can offer documentation and the required technical support (possibly for an additional fee).

Partners should be able to use Galaxy to help get their integrations to market more quickly, and make their offerings more accessible to a broader market. For instance, Galaxy’s try and buy program gives developers a way to demonstrate ROI before they buy–giving skittish and/or cash-strapped SMBs a risk-free way to try the integration and see if it pays off before they have to spend money for it.

In addition, partners can take advantage of Galaxy’s community to tap into the integration requirements across a range of businesses. This should enable them to tune their integration solutions more closely to actual requirements and meet market needs in a more repeatable and profitable manner.

What Does Galaxy Do for Pervasive?

Pervasive has initiated, built and will maintain and manage the Galaxy marketplace platform. Galaxy gives Pervasive a centralized mechanism to market and provide access to its growing array of development and testing tools–including Pervasive Data Integrator, Pervasive DataCloud, Pervasive Data Profiler in a more streamlined way to developers and integrators–and build a new revenue stream based on the sales of the integrations that partners build and sell.

As the community grows, Pervasive should also be able to extract a lot of insight about customer and partner integration requirements and demands across different horizontal, vertical and geographic markets, which it can use in its own product planning efforts.

Pervasive and its community members will jointly deveop and participate in demand generation and building visibility for the Galaxy market, vendors and community.

At some point, Galaxy could serve as a launch pad for integration testing and certification, conducted either by Pervasive or possibly by the community, helping to reinforce Pervasive’s position as a leader in the integration space.

Quick Take

The integration challenge is becoming increasingly more complex because of trends such as cloud computing, mobile solutions, social media and the exponential growth of data. These trends will continue to drive the need for companies to integrate more applications and data from an increasingly dizzying array of sources.

These trends are also driving Pervasive and its integration competitors to tear down some of the barriers that have made integration so difficult in the past (see Dell and Boomi: Doubling Down on Integration, for our view on Dell’s approach to this challenge).

With Galaxy, Pervasive has built a streamlined, in-context ecosystem for customers to search for, identify, evaluate and purchase integration solutions. As important, Galaxy gives users a place where they can voice their integration experiences, concerns and requirements. Meanwhile, Galaxy should help partners market their solutions, and gain insight on integration gaps and requirements from a much broader audience, and amortize the costs of developing their integrations over a larger number of customers. The ecosystem approach puts vendors and customers on the same page and fosters the collaboration that should result in a win-win.

However, while Pervasive has built Galaxy, the question remains, will enough users and partners come to make it a true integration destination point? To fuel customer interest, Galaxy needs a strong cadre of actively engaged developers, SIs, and integrations in its ecosystem. Conversely, to attract partners, it needs a lot of customers that partners can sell their services to. Pervasive will need to double down on its social media, marketing, partner engagement and other related activities to ensure Galaxy reaches its goals–especially as it faces strong competition from the big guys–in our opinion, particularly from Dell-Boomi, which appears to be thriving under the Dell umbrella.

But, Pervasive’s smaller, independent status, can also play in its favor, as noted in Top Takeaways from Pervasive’s 2010 IntegratioNext Conference. It can keep a laser-like focus on the integration needs of customers and the business development needs of partners. And its independent status may appeal to prospective partners that may having differing agendas than, or encounter red-tape challenges when working with Pervasive’s larger rivals. If Pervasive can use this agility and focus to its full advantage, and rev up marketing and social media engagement, Galaxy should succeed in it mission to create a vibrant integration marketplace.

However, times changed, and Dell started to look like a one-trick pony. As Michael Dell himself acknowledged at last week’s Dell’s 2011 Virtual Era Analyst Event, which I’m paraphrasing here, “Dell had a winning formula that worked for a long time…but then it didn’t work so well anymore. Technology changed, as did customers’ expectation of technology, and Dell had to reinvent itself.” After re-taking the helm in 2007, Michael Dell began charting a new  course for Dell–one designed to help it capitalize on market demand for better, more cost-effective and easier to use IT solutions.

At last week’s event, Dell provided us with an update on its strategy to help companies in the anytime, anywhere virtual era by providing customers with “open, capable, affordable solutions.” For Dell, this means building solutions on open, industry standards; providing customers with choice; virtually (instead of vertically) integrated solutions; and ensuring that solutions can scale as required.

By leveraging cloud computing and remote services, and delivering the right blend of hardware, service and software offerings as more complete solutions–instead of as commodity piece parts–Dell’s aim is to solve customers’ IT problems instead of creating new ones.

How Dell’s Strategy Plays in the SMB Market

At this year’s event, Dell put SMBs in the spotlight. Steve Felice, president of Dell’s Consumer, Small and Medium Business unit, took center stage in the line-up of keynote presentations, mapping out Dell’s SMB vision. Dell’s other executive presenters and panelists–up to and including Michael Dell–underscored Dell’s commitment to delivering products, services and solutions tailored to the needs of SMB customers as well. (This contrasted with last year’s event, at which Dell mentioned that it would use mid-market businesses as its design point, but then quickly veered into large enterprise territory for the bulk of the event).

More importantly, Dell is putting meat on the messaging bones at both ends of the SMB spectrum. For example:

• Dell’s focal point for the Virtual Era is the mid-market. Dell defines the mid-market as companies with 500 to a few thousand employees. It believes that by starting with mid-market requirements, Dell believes it can more readily scale up or down and make the economics of IT work better for businesses of all sizes, because mid-market companies have complex IT needs, but scarce IT resources–and can’t afford a lot of expensive labor or IT tools. They need more complete, automated, fixed price IT solutions and services. Recent Dell acquisitions such as Dell KACE, which Dell acquired KACE, which helps simplify systems management and deployment with appliance and cloud-based solutions, and Boomi, which supplies cloud integration services to help companies affordably integrate cloud and on-premise applications,  focus on mid-market problems. Dell’s results to date illustrate how this approach is shaping up: KACE sales are up 400%, and Boomi (see Dell and Boomi: Doubling Down on Integration) sales are on track to double by year-end.  At Dell’s Take Your Own Path SMB event in December 2010, I met several Dell SMB customers, (see SMB Group video interviews with Chitale Dairy and Pixomondo) that are using these and other Dell solutions to help move their businesses ahead of the competition. 

• Capitalizing on the consumerization trend. IT innovation used to move mostly downstream, from large enterprises to the consumer. These days, the direction has reversed. Consumers are buying brighter, shinier and often more capable devices than they get at work–and bringing them into the office. Entrepreneurs are starting their own businesses, and don’t want to sacrifice the looks, power, capability and ease of use of consumer devices for stodgy and unwieldy business products. In a nutshell, consumer IT is raising the bar for business IT. Dell is taking advantage of its position as one of only two major vendors with an end-to-end portfolio that spans client devices from consumers through large business. Dell’s consumer products provide it with a great access point to small businesses. Since the introduction of its small business Vostro line in 2007, Dell has continued to make refine and expand its offerings to help small businesses bridge the gap from consumer to prosumer and up with a portfolio of PCs, notebooks, tablets and smartphones geared to different needs across this spectrum, along with services to help with device manageability, security and control. In particular, Dell has been aggressively expanding its mobile offerings with a comprehensive line-up of Android and Windows 7 devices to capitalize on the transformational shift to mobile computing.

• Taking a more channel-friendly but not a channel-only approach. Dell has moved from being a poster child for the direct model to a company that recognizes the value of the channel and the role it plays in the SMB market. Several of its recent acquisitions, including Compellent, EquaLogic and KACE brought strong reseller channels that Dell is building on. However, Dell also recognizes that while many SMBs continue to rely on the channel, SMBs are increasingly purchasing at least some of their IT solutions directly, as indicated in SMB Group’s 2010 SMB Routes to Market Study.  Unlike its major competitors, Dell’s first priority is to bring greater IT efficiency to the market–not on maintaining an IT channel that doesn’t add value. This should increase the odds that the channel partners that work with Dell are actually adding value instead of just serving as middlemen.

• Becoming a bona fide software and services provider.  Dell and others have talked about “productizing” services and automating technology solutions to make them more affordable and provide better business value. Dell’s recent string of software acquisitions and its purchase of Perot Systems indicate Dell’s intent to become a serious force in this realm. Dell’s investments to date to build cloud infrastructure and services foreshadow its future intent to offer an expanded range of public, private and hybrid cloud solutions for SMBs. In addition, Dell’s Managed Services footprint is growing, with 9000 team members in 39 countries who provide an array of services, from application services to break/fix. Dell’s focus on using cloud and other technologies to help provide remote, automated services should make these services more affordable for SMBs.

Quick Take

Dell’s strategy for the Virtual Era and mid-market design point bode well for SMBs. Unlike the many technology vendors that speak in jargon-riddled tongues that can make your head spin, Dell execs are also able to tell the story in a way that mere mortals can understand. As important, Dell has found the silver lining in the Dell Hell support crisis of a few years back, building extensive social media capabilities so that it can listen to what customers want, and map to these requirements. Finally, Dell is walking the walk–investing in and building the software and services capabilities it will need to deliver its vision to SMB customers.

Dell contrasts its perspective with that of its traditional major competitors–HP and IBM, which it contends skew towards a large enterprise design point. While I think Dell may be overstating this, Dell’s SMB strategy and solutions seem to be more deeply entwined with the fabric of the corporate vision as a whole.

Of course, I’d like to see Dell go even further with its SMB agenda. Some top of mind ideas:

• Provide a less expensive but just as inviting alternative to the Mac. Many entrepreneurs and small business owners are defecting from Windows PCs to Macs not because of hardware issues but because they’ve had too many experiences where the Windows slows down and gets funky. I’d love to see Dell put more focus into raising the profile of its non-Windows PC and desktop alternatives.

• Offer a turnkey social media service for SMBs. Dell really gets social media, and in my opinion, is ahead of the field in understanding how to use it effectively. It would be great if Dell created a streamlined, turnkey offering to help SMBs use, monitor and manage social media. As we learned in the SMB Group’s 2011 SMB Social Business Study, and as highlighted in this post, Is There a Method to Social Media Madness, only about a quarter of SMBs are using social media in a strategic way, and few are using tools to manage and ensure that they’re getting return on their social media investments.

• Solve the SMB dilemma of having to buy and pay for multiple mobile service contracts for different devices. How about using a little muscle with AT&T (Dell also needs to offer its mobile devices through Verizon) to enable–instead of prohibiting–SMBs to tether their notebooks with their smartphones (instead of banning this) via a bundled service package. The SMB Group’s 2010 SMB Mobile Solutions Study showed that expensive data plans for mobile services are the biggest inhibitor to SMBs adopting mobile solutions, as discussed here.

Dell’s commitment to the SMB market is coming through loud and clear. If it can stay focused and be bold, it has the opportunity to do some big things for SMBs that should really pay off for both Dell and for its SMB customers.

When big companies gobble up smaller ones, you always wonder whether the acquired company will get swallowed up into the belly of the beast, derailed or morphed into something unrecognizable.

In November, Dell acquired Boomi, which provides AtomSphere®, a cloud integration service that promises to help companies more efficiently and affordably integrate cloud and on-premise applications.  Boomi’s integration cloud helps Dell solve the problem of integrating applications across different locations, networks, clouds and companies (Figure 1). The Boomi acquisition also underscored Dell’s broader strategy (and a string of acquisitions) to create a cloud computing portfolio to help customers maximize the benefits of cloud computing in what Dell calls the “Virtual Era.”

Fortunately, it looks as if Dell is helping Boomi stay the integration course, as we learned in a recent update on the progress of the Dell-Boomi acquisition. In this brief, we provide a brief overview of what Boomi is and what it does, highlights of its new Spring 2011 release, and our perspective on how the Dell-Boomi acquisition is shaping up.

Figure 1: Boomi’s Integration Cloud

What is Boomi and How Does it Work?

Boomi gives companies of all sizes a one-stop shop where they can integrate any combination of SaaS and on-premise applications, and third-party trading partners via Boomi’s AtomSphere integration cloud.

The secret sauce that enables Boomi AtomSphere to deploy these integrations as a service is the lightweight, distributed runtime engines that Boomi calls “atoms” (Figure 2). Boomi’s patent-pending atoms contain the components needed to execute an integration process—including connectors, transformation rules, decision handling and processing logic. With Boomi, customers and partners can:

• Sign up for an account and begin building integrations immediately for free. Boomi provides a free Trial via the Web, and users can develop the integration without paying a fee.  Once they deploy the integration, users pay for it with monthly subscription pricing.

• Create integrations without programmers. Based on user feedback, Boomi has redesigned the user interface a couple of times over the years to make it user-friendly for the likes of systems analysts, advanced CRM administrators, or those with report-writing and business intelligence skills.

• Choose where they want to run their Boomi integrations. Users can have Boomi run their self-contained, autonomous “Boomi atom” integrations in a public cloud, or in a private cloud or on-premise behind their own firewalls. But, while users choose where they run their Boomi atoms, these atoms always connect back to Boomi’s data center for centralized management, updates, etc. via the AtomSphere cloud.

• Build and/or use pre-built integration widgets. Boomi and its partners also provide pre-packaged integrations in ready-to-run wizards that business users can deploy.  ISV partners typically build these widgets and bundle them with their applications. The widgets contain the application connectors plus the data mappings and transformation logic, and feature wizards to walk end-users through the integration in a step-by-step fashion. For example, Taleo has built Boomi a widget for Workday to ADP integrations.

• Use the Boomi dashboard to monitor the status and health of all of their integrations, and provide an audit trail.

Figure 2: How Boomi Works

As important, Boomi doesn’t impose any additional security concerns for users. When customers deploy the atom behind their firewall no data passes through AtomSphere. AtomSphere only monitors the health and status of the atom—the data only flows directly between the applications being integrated.

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Community is another significant part of Boomi’s value-add. The Boomi dashboard features a green feedback button, and Boomi implements at least 25% of the top-vote getters each quarter. In addition, Boomi Suggest aggregates integration maps (over 15,000 live maps to date) from users. When another user has a similar integration requirement, Boomi Suggest generates automated mapping guidance that typically provides about 80% of the data mapping required—cutting time and cost from the most time-consuming part of creating an integration.

The Boomi ecosystem also houses public and private connector communities, so that once someone builds a connector, they can share it. Boomi provides a revenue share arrangement for companies that build public connectors and widgets.

Boomi’s Spring 2011 Release

Boomi’s Spring release centers on four key areas:

1.     Providing additional connectivity to legacy middleware, such as IBM MQSeries, Tibco, webMethods, Progress, etc. to make it easier for companies to connect Boomi integrations with their on-premise integration services, enabling them to more easily connect existing integrations and applications to SaaS and cloud applications.

2.     Supporting simpler, faster processing for large data sets. This enhancement simplifies data migration, and includes automatic support for Salesforce.com’s bulk API, designed for organizations that need to load large amounts of data into Salesforce.com. Instead of dealing with Salesforce.com’s complex API directly, Boomi users simply check a box, and the tool calculates the optimal batch size for loading.

3.     Anywhere integration monitoring. With the advent of cloud computing, applications and data are increasingly distributed across many different locations, networks and corporate boundaries. Boomi atoms enable users to distribute integration capabilities to these disparate data sources, without sacrificing centralized monitoring and management across integrations. Boomi has also added a new API so that users can connect Boomi to third-party monitoring, such as Dell OpenManage.

4.     New partner support programs. Boomi has introduced a 4-day hands-on boot camp for integration practitioners, as well as a new 3-level partner certification program to promote consistent service quality across the partner ecosystem.

While some of these enhancements focus on large companies, they also make it easier for ISVs and SIs to develop, monitor and manage widgets and integration services for their SMB customers.

Why Should SMBs Care?

As noted in the SMB Group’s 2011 SMB Top Ten Technology Trends, cloud computing and software-as-a-service (SaaS) have taken IT cost and complexity out of deploying business solutions, making it easier for SMBs to deploy applications to help run their businesses more effectively.

While some vendors provide integrated business suites, most companies run a mix of on-premise and cloud applications from different vendors. For instance, they may use Intuit QuickBooks, a Sage or Microsoft solution for back-office accounting and ERP needs, Salesforce.com for CRM, and other cloud applications for marketing or HR.  But they often lack the time, money or appetite to integrate these applications. When applications don’t “talk to each other” businesses waste a lot of time re-entering redundant data and reconciling inconsistent and inaccurate information across key workflows, such as order to cash. At the same time, the volume of data that SMBs must manage is growing exponentially–adding to the integration challenge.

Simple, clean and affordable integration options help SMBs decrease the time it takes to integrate applications, and derive maximum value from the business solution investments, by:

• Streamlining connectivity between internal applications and with third-party applications and processes.
• Reducing the time, errors and business costs associated with inaccurate data entry.
• Providing a consistent, real-time view of information across integrated applications.

When ISVs or integrators offer SMBs a short cut to integrate applications with those of relevant partners, they help remove adoption barriers and enable SMBs to get more value out of their business applications with less hassle.

How the Dell-Boomi Acquisition Is Shaping Up

Hosted by Dell’s SMB Group (and also working closely with Dell’s Services team), Boomi has retained its offices and independence in Philadelphia and San Francisco. Dell has put a corporate integration executive in place to help smooth the transition, and is investing to double Boomi’s staff by the end of 2011.

However, Boomi continues to gear its offerings for enterprises of all sizes, with revenues evenly split between large enterprise and SMBs. For instance, Mindjet, which has about 250 employees, wanted to standardize its business application integrations to minimize ongoing technical support requirements, and support Sarbanes-Oxley compliance. The company was able to create its first integration in 5 weeks, without using any internal IT resources, is using Boomi’s centralized management and data auditing capabilities to comply with Sarbanes-Oxley, and is adding additional integrations.

About 75% of Boomi’s are channel influenced. Boomi has grown its ISV and SI partner roster to 70+ companies. As discussed earlier, partners can build widgets and deliver them to customers as a packaged integration. Boomi estimates that about ½ of its ISV partners build widgets, and each typically creates about 3 to 5 of them. In addition, there are about 15, 000 live data maps in Boomi Suggest and about 200 connectors in Boomi communities.

SMB Group Summary and Perspective

The integration challenge has always been complex, and continues to become more multifaceted. More applications need to be integrated both in the cloud and on-premise. In addition, adoption of new mobile and social media solutions is on the rise.

Six months into the acquisition, Dell’s approach appears to be on target. Boomi has stayed focused on its mission of helping companies overcome one of the major hurdles to adopting new cloud-based solutions—without having the burdens of raising capital or fielding questions about financial viability.

As a result, Boomi’s growth curve is accelerating. Although some of the Spring 2011 enhancements seem most appropriate for larger customers, they should also help ISVs ease integration issues for SMBs in a more scalable manner. In many cases, SMBs often lack the skills or resources for do-it-yourself integrations, and pre-built connectors and widgets from ISVs are a much better fit.

Looking ahead, while Dell and Boomi indicate they will continue to nurture this channel-friendly, community-centric strategy, Dell is starting to train its own sales, services and specialist teams on Boomi. Although the Dell-Boomi offering faces strong competition in the integration arena from the likes of IBM-Cast Iron, Informatica and Pervasive, Dell teams should provide Boomi with a strong sales boost among both end-users and partners, especially if Dell can leverage Boomi out to its worldwide teams to take advantage of global opportunities.

Overall, Boomi’s cloud integration solution is a good fit with Dell’s expanding cloud computing strategy. As important, Dell’s corporate integration approach appears to be off to a good start to providing the combination of nurturing and autonomy that will help Boomi thrive and optimize the value it can deliver to Dell, its partners and customers.

Under the terms of the deal, Intuit will resell a pre-integrated version of the Salesforce CRM application via Intuit’s App Center (as well as Intuit channel partners). Data will be automatically synchronized across QuickBooks and Salesforce, giving customers a real-time, unified view of the data, regardless of which application the customer is working in.

Intuit and Salesforce indicated that the integration should be completed this summer.

Above the Surface

Clearly, the deal provides Salesforce with a great entrée to Intuit’s 4.5 million QuickBooks users, gives Intuit a marquee CRM partner in the App Center.

This is also a very big deal for customers. While the small business CRM market is fragmented, Salesforce is a top CRM vendor in small business. Demand for integration between QuickBooks and Salesforce is evidenced by the fact that so many integration vendors—Dell-Boomi, Pervasive, Informatica, IBM-Cast Iron and others—offer this integration, which is typically priced at about $50 to $75 per month. With a direct QuickBooks-Salesforce integration, small businesses get a seamless way to synchronize data between QuickBooks and Salesforce.com without having to buy an additional integration service or solution. (Although pricing has yet to be announced, I’ve been told that it will be more economical than using third-party integration tools).

Below the Surface

The partnership also provides Intuit with substantial validation for the approach it has taken with the Intuit Partner Platform  (Intuit Partner Platform: Changing the Rules of Cloud Platforms with Federated Applications). Intuit’s “federated applications” approach means that instead of having to rewrite applications from scratch, partners that have built their applications on other cloud platforms can use basic XML integration to configure or “federate” their solutions with key integration points, including the user interface, billing, account management and permissions, data and single sign-on to ensure that their solutions integrate with QuickBooks and other solutions on the Intuit Workplace.

This approach removes a lot of development and partnering barriers—in fact, it seems that it removed enough barriers for Salesforce that it is, for the first time, providing its solutions via a partner’s platform, rather than requiring the partner to develop on Force.com.

Salesforce also gains a new venue for Chatter (free with all of its CRM offerings, including the small business editions noted above). As I’ve said many times, collaboration is the only activity that every employee in every company engages in everyday. In addition to getting another on ramp for CRM, Salesforce can also make new market inroads for Chatter and its collaboration strategy ( Salesforce’s Dimdim Acquisition–Adding to a String of Collaboration Pearls).

Quick Take

Many analysts and pundits have been asking (and arguing about) whether this is a bigger win for Salesforce.com or for Intuit. At first blush, my take was that Salesforce would potentially have more to gain because Intuit would be promoting and selling Salesforce CRM and Chatter to its installed base.

Giving it a little more thought, I’m thinking it’s a pretty balanced deal. Having a high-profile partner such as Salesforce should help Intuit attract more end-user customers to its App Center, and pull in more developers as well—in line with its goal to establish the App Center as “the” app store for small businesses.

Small businesses win big too. Integrating business solutions shouldn’t cost more than the business solutions themselves, and this partnership should make integration and the benefits it provides more attainable for more small businesses.

Furthermore, there’s nothing exclusive about the deal for either party. Salesforce, will, of course, continue to partner up with FinancialForce, Intacct and countless other financials vendors, and Intuit can do the same with CRM and collaboration vendors.  Which is a good thing—because small business is anything but a one-size-fits-all market, and neither vendor should presume that this is the best accounting-CRM pairing for all of their small business customers.

Here are the SMB Group’s Top 10 SMB Technology Predictions for 2011! A more detailed description of each follows below.

1. Mobile Commerce Lifts Off

2. SMBs Demand that Vendors Bring Order to Social Media Chaos

3. App Stores Become a Key Information Source and Channel for SMBs

4. The Shift to Cloud Computing and Software-as-a-Service (SaaS) Becomes Irreversible

5. A New Cloud Channel Model Forms

6. The Transition to the Insight Economy Gets a Bit Easier

7. Tablets Add Fuel to the Mobile Applications Explosion

8. Better, Faster Integration Becomes a Key Business Solution Differentiator

9. Hybrid Computing Requirements Accelerate Virtualization Adoption

10. Continued Convergence of Unified Communication and Collaboration Suites

2011 Top 10 SMB Technology Market Predictions in Detail

1.     Mobile Commerce Lifts Off: Today, mobile commerce is in its infancy, but with the Internet in our pocket or purse, it’s only a matter of time before it takes off.  As big retailers and companies invest to make mobile commerce easier, more convenient and more secure, the pressure mounts for SMBs to develop mobile commerce capabilities to stay competitive. The SMB Group’s 2010 Mobile Solutions Study reveals strong SMB plans for mobile web sites, payments, product and service tracking, document sharing and sales/support/service in the upcoming year.   However, key drivers for mobile commerce and adoption plans vary by industry, phase of business and other factors. Vendors will need to tailor messaging and solutions to resonate with these different requirements. As SMBs become more dependent on mobile commerce, they will also look for ways to integrate mobile commerce with ERP/accounting and CRM systems to save time and increase efficiency.

2.     SMBs Demand that Vendors Bring Order to Social Media Chaos. SMBs are jumping on the social media bandwagon to help attract new customers and improve customer relationships. But managing marketing, branding and reputation across and between social media (e.g. Facebook, Twitter, blogs, etc.) and other digital marketing venues (email marketing, search engine marketing, etc.) as well as more traditional CRM solutions can be a nightmare—and surfaces as a top technology challenge in our 2010 Routes to Market Study. In 2011, SMBs will demand converged solutions that streamline inbound and outbound interactions across different channels, and help  measure their effectiveness. Vendors are stepping up efforts to help meet this challenge. For instance, BatchBlue “Social CRM” integrates contacts sales and social media feeds for small businesses; HubSpot’s inbound marketing helps companies create, optimize and promote content to “get found,” convert and close more business, and link to relevant conversations across the Web in a unified dashboard; Sage CRM Solutions integrates social media with opportunities and contacts to help sales, marketing and support people prioritize and focus sales activities and marketing campaigns more effectively; and Salesforce.com makes Chatter available for free to all Salesforce users to integrate profiles, groups, online document sharing, task management, contacts, web forms, status updates, newsfeeds with CRM.

3. App Stores Become a Key Information Source and Channel for SMBs. In our 2010 Routes to Market Study, respondents rated “figuring out how different solutions can help the business” as their second most vexing technology challenge. SMBs most often turn to search engines, vendor emails and websites to help sort through this confusion, and keep up with information about technology solutions.  SMB app stores—aka marketplaces—go beyond search engine listings to provide user-generated ratings and guidance to help SMBs determine best-fit solutions. They offer single-sign on access to apps and integration capabilities. Google Apps Marketplace, Intuit’s Workplace, GetApp.com, Constant Contact Marketplace and Zoho Marketplace are just a few examples of SMB-focused app stores that have launched recently. In 2011, they will become a more important source and channel for SMBs—our survey results show that more than half of all SMBs use or plan to use app stores. Vendors that run their own app stores will need to stay ahead of competitors not only by offering the best selection of applications, but by providing superior information, community, guidance, integration and ecommerce experiences.

4.     The Shift to Cloud Computing and Software-as-a-Service (SaaS) Becomes Irreversible. SaaS and cloud computing vendors have been pitching the mantra of easier, faster and more affordable solutions for SMBs since the late 1990s when pioneers such as NetLedger (now NetSuite) and Employease (now part of ADP) launched. But the great recession has accomplished what marketing alone could not. From 2009 to 2010, SMB awareness, interest, consideration and adoption of SaaS and cloud solutions has spiked. Our 2010 Routes-to-Market Study reveals that more than 25% of small and 12% of medium businesses now use collaboration, customer management, online marketing and business analytics as cloud-based services. Economic necessity has driven more SMBs to the cloud, and once in, they are seeing mostly positive results–not only in terms of cost savings and time to solution, but in being able to re-deploy scarce (if any!) IT resources from application support and management to more strategic activities. As important, they are getting significant business value from real-time visibility and collaborative capabilities that are intrinsic to cloud computing–and provide a compelling case to expand their use.

5.     A New Cloud Channel Model Forms. Cloud vendors deliver many of the things that IT channel has traditionally provided–software and hardware sourcing, installation, management, etc. As a result, cloud computing doesn’t neatly align with the traditional IT channel provider role, and many VARs and SIs have been wary of cloud computing. But as customer demand catches up with early hype, and the lure of annuity revenues and higher value services grows, more channel partners are inclined to get on board—even if they’re not yet sure how to straddle two very different business models. At the same time, more cloud solution vendors are acknowledging that partners will be critical to fuel future SMB market growth. After all, while the cloud removes technical barriers to adoption, SMBs often need the one-on-one guidance to derive maximum business value from solutions. In 2011, a new channel model will begin to take shape, incorporating greater collaboration and joint goal setting between cloud vendors and partners; a selective partnering framework that gives fewer partners more opportunity to make money; more transparent and simplified partner programs; and increased incentives for customer satisfaction, cross-selling and renewals. Vendors to watch here include Intacct and Acumatica.

6.     The Transition to the Insight Economy Gets a Bit Easier. Experts tell us that 1.2 zettabytes of digital information will have been created in 2010. A zettabyte is 1,000,000,000,000,000,000,000 bytes (that’s 21 zeroes!) Whew! Online video, social networking sites such as Facebook, digital photos and cell phone data all contribute to the data pile-up. No wonder that SMBs in our 2010 Routes to Market study said their #1 technology challenge is “getting better business insights from the data we already have,” and that 40% of medium businesses plan to spend more in this area in 2011. Luckily, SMBs have more options than just a few years for digestible BI solutions. Vendors such as  Adaptive Planning, IBM/Cognos (and now Clarity), SAP Business Objects, Rosslyn Analytics and Xactly offer function-specific and/or modular solutions that zero in on a specific task such as performance management, spend analysis or pipeline management. And several on demand/SaaS BI solutions (check out Birst, Cloud9 Analytics, PivotLink, Zoho Reports)  are designed to be easy and inexpensive enough for many small businesses to use and get those important “aha moments” from.

7.     Tablets Add Fuel to the Mobile Applications Explosion. Smartphone apps have already caused a seismic shift in the IT industry—and in how SMBs use and interact with technology and the world. Increasingly, SMBs have mobile workforces that need real-time information and access to applications no matter where they are. The iPad’s swift rise and a slew of new tablets from vendors such as Dell, HP, RIM, Samsung has led to a quick ramp up in tablet adoption. Our Mobile Solutions Study reveals that 10 % of small businesses and 22% of medium businesses have at least some employees using tablets to help them get more done on the go. However, while SMB adoption of calendar, contacts, email and web access is almost ubiquitous, the mobile business solutions market is still largely untapped. But, SMB plans to invest in mobile marketing and advertising, customer service management, social media solutions are on the rise. Innovative, versatile tablet designs and capabilities will further accelerate the availability, quality and adoption of mobile solutions among SMBs. However, fast-paced traction of newer devices, such as Android-based tablets underscore that SMB device preference is highly volatile—so look out for the next new thing that can shift the landscape

8.     Better, Faster Integration Becomes a Key Business Solution Differentiator. Integrating business solutions with each other and with other applications shouldn’t cost more than the business solutions themselves. This is especially the case for SMBs, who usually don’t have the money or appetite for complex or time-consuming integrations. This reality has driven IBM to acquire Cast Iron earlier this year, Dell’s recent purchase of Boomi,  and Pervasive’s strong growth. Because simple, clean integration options save SMBs time and money, they will increasingly become a vital factor in SMBs ‘short list selections. The good news is that options in this area are growing, and include: comprehensive integrated business suites, such as NetSuite; solutions that come with embedded integrators for typical integration scenarios; app stores that streamline integration among participating solutions; and on demand integration marketplaces, such as Pervasive’s DataCloud marketplace.

9.     Hybrid Computing Requirements Accelerate Virtualization Adoption. Even as SMBs embrace cloud computing, they will continue to use packaged applications that are working just fine. In addition, some businesses will purchase new on premise solutions because they best meet their needs, or due to privacy, security or regulatory considerations. For the foreseeable future, most SMBs will need to combine on-premise and cloud solutions in a hybrid computing approach. As virtual server desktop and storage options grow, more midsize businesses will consider cloud enabled high availability and disaster recovery solutions, which until now, have been desirable, but largely unaffordable for SMBs. They will also look to managed services providers for remote management of their on-premise IT infrastructure, and for help in implementing and managing virtualization and cloud-based business continuity/disaster recovery solutions. Look for VMware to lead the way, with others, such as Citrix and Microsoft playing catch up. A growing mobile workforce combined with next-generation virtual desktop solutions, such as IBM Virtual Desktop for Smart Business, will also spark greater interest in the virtual desktop area. However, vendors will need to continue to invest to educate SMBs about the cost savings, management, and provisioning benefits to further SMB understanding and adoption.

10.  Continued Convergence of Unified Communication and Collaboration Suites. In 2010, the collaboration battle swung into full gear, with many vendors introducing integrated solutions that pull together suites to help make it easier for to find and share information, extend and enhance shared knowledge, and connect with people more easily than with email and disjointed point solutions. Because collaboration is the only business activity that every employee engages in every day, large vendors such as IBM, Cisco, Google and Microsoft, as well as a slew of smaller ones from HyperOffice to Zoho will continue to ratchet up efforts and add more capabilities to expand their market footprints. Vendors are also filling in gaps in their unified collaboration and communications portfolios, such as Cisco did with its Tandberg acquisition; Google has done with Google Voice, to add VoIP and softphone capabilities; and as HyperOffice and IBM LotusLive have done with Skype. And of course, all are integrating social networking capabilities as well. As the kinks get worked out and the integrations become smoother, these converged services can help SMBs to declutter their in boxes, improve productivity and save money.