Interesting  post from Gordon Ritter founder of Emergence Capital Partners on future of Software as a Service(SaaS) on Venturebeat.   

When I was reading quickly through RSS feeds on offshore software development I came across a list. This list mentioned several points when company thinks of or outsources their software development activity. Almost all the points got covered there.

Pondering over that for a while a question stroke me 'Why companies outsourcing heavily to India than other countries in the world?'. Is that simply because India has good ratio of English speaking population per thousand graduates? Or is it because they are technically competent? Both reasons are mostly true. With this fact getting published in every third article on offshore software development other countries got bombarded with a thought that they need to score well on English and Technical competence. And they have started doing well and have started fighting with India for their share in outsourcing pie.

Coming back again to list leaving this thought I realised that the list was about only when company thinks or outsources. That list has nothing mentioned to whom to company should outsource. The another next very important thing that company should take into account while selecting their outsourcing vendor is domain knowledge. This is the field where India need to improve. A quote from Mr. MrinalaSingh flashed my memory. He says, "In fact a recent observation mentioned that this is a concern not only for small corporations but also for vary large system integrators, where an area on which India based services firm lack is in lack of domain knowledge."

I think our clients are fortunate to outsource their activities to e-Zest because here we put a lot of efforts in domain understanding rather than just converting their requirements in 010101 binary codes through some high level language.

Domain knowledge is something that e-Zest has and India lacks. But Indian IT industry is doing fair in acquiring it. After all, as an international industry it has to stand the competition. All the best for Indian IT! 

Innovative product design is always a risky proposition.

There is definitely a certain degree of uncertainty whether such product is received in the market or not. Many organizations take the same path and build their products with what is available in the market and can be well received by their consumer base. This consumer base can be a loyal one or profound one created by some buzz by that product in the market.

This way, the product survives but can not be a market leader, since its user driven. To build a market leader products, these organizations or product owners had usually go beyond what their user demands. Here we need to always remember that “many users think from the viewpoint of necessity.” The radical shift will only occur when product owners combine the basic necessity of using their products plus organizations/product owner’s vision.

If the product has been built with “Vision” elements then it will “Standout”. The product owners always feel the heat of the imitators after a short period. It’s been risky to loose hard gained market share to mere people who had just imitated your product. But visionary products can very well compete with imitators.When we think “innovation” in product, it never comes only in one aspect of product. Innovation makes every piece of product radically different and be it a product road map or product implementation or product marketing! Product imitators fall back in this respect.

You might be wondering the musings or these thoughts are only the fantasies and could not be implemented. Ok! Just look at “i-Pod” and read this post again.

Interesting post from Byron Deeter on Sandhill where they studied more than hundred SaaS companies and came up with following laws for building highly successful SaaS businesses.

• Key business metrics for SaaS companies should be CMRR (Contracted Monthly Recurring Revenue) and Cash and not bookings
• It takes at least $300K of CMRR to climb the Sales Learning Curve - Stop at three sales reps until at least two of them are making $100K MRR quotas.
• As soon as you have climbed the Sales Learning Curve, begin ramping your sales force by hiring renewal-oriented account managers.
• Channels are very hard for SaaS companies to build, so do not base your plan on SIs and traditional ISVs. You will need to sell directly for a long time.
• Stay local - Prove your business in your market first.
• Invest early in backup and disaster recovery, but stick to one data center till listing
• Single instance, multi-tenant - Have only one version of the code in production. Say no to on premise deployments
• Savvy online marketing is a core competence (sometimes the only one) of every successful SaaS business.
• Constantly trade off cash vs. growth
• SaaS requires R&D and sales expense up front for a multi-year stream of revenue, so it demands enough investment capital to fund 4+ years of runway

Thoughts worth pondering for companies already having SaaS delivered products or planning for it.

At e-Zest, we have been providing similar kind of recommendations to our customers as part of SaaS delivery consulting services  and its quite satisfying to see that research findings are in line with what we have been recommending for quite some time .

For complete post of Byron Deeter, please refer http://www.sandhill.com/opinion/editorial.php?id=176

Today it'€™s my first post on e-Zest corporate blog and I am very much excited to see lot of interest from readers and within e-Zest in very short span of time. Right now IT world is talking about state of US economy and its impact on outsourcing and specifically offshore outsourcing of IT and ITES services. In the flat world business dynamics are changing fast and I believe innovation in business processes, product and services,business models and service delivery approaches will be key factors in competitive success of organizations worldwide.

I see three key technology drivers having major impact in 2008 for consumer products or services accessed using browsers and business applications used by enterprises for managing business processes. Maturity of social media applications and Web 2.0 technologies, Industry wide acceptance of Software as a Service(SaaS) delivery based business applications and few success stories of successful implementation of service oriented architecture(SOA) based enterprise business platforms.

We should not see each of these technologies as silos growing independent of each other, rather convergence of Web2.0 technologies, SaaS delivery and SOA will drive major business innovations in next few years. We should also understand that recession in USA will drive faster adaption of this technology convergence than adversely affecting this, as pressing bottom-lines, cost cutting, personal pressure driving need for social space and need for integration of existing platforms and services for integrated solutions offerings will drive key business innovations. 

Have you thought of this in your business plan for year 2008?

e-Zest Solutions, an outsourced software product development company with expertise in software product engineering & custom software and enterprise application development, is participating in CeBIT 2008 at Hannover Germany. e-Zest will demonstrate its various technology, services & domain competencies.

The global software outsourcing proportion is changing at a greater pace and pie of Europe is constantly increasing. e-Zest is participating at CeBIT 2008 to reach closure to European companies & offer its software outsourcing services. e-Zest Solutions is participating at CeBIT for the consecutive second time.

e-Zest will be demonstrating its Java, Microsoft and Open source competencies along with its newly established Oracle competency. Though competencies tell a lot about e-Zest's expertise in various technologies, Amol Pande, Executive Director, believes "What sets e-Zest apart from its competition is its soft skills & diligent process driven approach that ensures proper communication between e-Zest and its clients".

Ashish Gupta, Executive Director, and Umesh Kulkarni, Business Development Manager, will be representing e-Zest during March 4 to 9, 2008 at CeBIT, Hannover, Germany. The team will also tour Europe to visit its prospects, clients and other stakeholders. Devendra Deshmukh, Founder and Executive Director, said that "e-Zest is open for meeting invitation during its Europe tour from companies thinking of outsourcing to India for better quality and competitive rates along with strategic development partner who will work as 'One Team' ".

e-Zest can be contacted at Hall 04 and Stall C80 during March 4 to 9, 2008 at CeBIT, Hannover, Germany.