Find below a variety of Saugatuck Strategic Perspectives, expanded 4-7 page "perspectives" on key industry trends, evolving market opportunities, and broader competitive / market impact, often supported by fact-based research. Strategic Perspectives retain our "Net/Net" philosophy, guided by a "So what?" framework, with a "Net-impact" summary, including implications and recommendations for user and vendor marketing, strategy and sales executives.

In addition to viewing the list of Perspectives below, organized by date, please take advantage of our Advanced Research Search capability to input a free-form text search, or the ability to search by author, by date, or by topic area -- or visit our Research Library by Topic.

08-27-10 C-Level Executive Attitudes in SaaS Adoption (Bruce Guptill, Brian Dooley, 5 pages, MKT-775, $$$)

Saugatuck’s recent Cloud / SaaS survey data has yielded a treasure trove of useful information as we reach a pivotal point in the deployment of technology amid ongoing global economic uncertainty. This Strategic Perspective offers our analysis regarding the attitudes of C-Level executives, who need to respond quickly to developing trends, toward SaaS adoption and use. We look at closely at three areas related to SaaS adoption: perceived benefits, concerns, and considerations in selecting a solution or solution provider. Overall, our analysis indicates a C-level willingness to move forward against a background of early implementation and hopes for cost reduction and greater efficiency. Concerns around security persist, but they are outweighed by the expected benefits.

08-20-10 Putting Process into the Intelligence of BI and Analytics (Lee Geishecker, 5 pages, MKT-773, $$$)

Over the past several months, we have presented the research agenda for BI / CPM / Analytics in the Cloud. We’ve discussed benefits and challenges, and have presented Key Issues around BI, CPM and Analytics in the Cloud, as well as drilled into one of those Key Issues. We have also talked about how vendors and users need to progress in the area of Performance Management. We now address the need to tie business and operational processes into Performance Management strategies, and introduce process-based BI in the Cloud.

08-19-10 Key Trends in IT Management (R. McNeill, 5 pages, MKT-772, $$$)

Saugatuck's ongoing research agenda focuses on the emerging IT trends that disrupt enterprise markets and business models. An important aspect of this work is our research and analyses regarding the most pressing challenges that CIOs have in relation to how they manage business services and the supporting IT infrastructure. Given softening economies and its impact on budgets, IT is increasingly beginning to be run like a business. 
We believe that four concurrent trends will introduce focus, discipline and transparency into IT including:

1. A growing process orientation across IT operations

2. A service-focused view of IT (that of the end customer, not the technology components)

3. Well architected and integrated IT management (rather than management of disparate tools and technologies)

4. A single system of record to gain easy visibility (rather than a number of separate databases that require extensive analytic efforts)

This Strategic Perspective frames the key issues facing IT management over the next five years and offers perspective on likely developments.

08-13-10 Multi-Platform Workloads: Managementally Challenged (C. Burns, 4 pages, MKT-770, $$$)

In July, IBM announced the zEnterprise and its associated BladeCenter Extension (please see sidebar Note 1 for a brief product overview). The attributes of the zEnterprise are crucial to many large enterprise customers. However, the BladeCenter Extension garnered broader customer reaction and attention and prompted renewed focus on the challenges of managing today’s multi-platform workloads.

08-06-10 A Functional Look at Involvement and Issues in SaaS Purchase Decisions (M. West, 4 pages, MKT-768, $$$)

In this Strategic Perspective, we take a close look at the most important business challenges impacting Finance, HR, Procurement and IT and the very high degree of involvement of each of these four key functional areas in purchase decisions for Cloud business solutions (aka SaaS). The data suggests that a high percentage (between 51 and 62 percent) of management in key functional areas across the organization is directly involved in SaaS purchase decisions. Each of these four functional areas, however, has its own challenges, some of them unique to the function, but several business challenges are common across multiple functional areas.

07-30-10 A Slice of SaaS Data: Buyer Source Preferences, Then and Now (B. Guptill, 5 pages, MKT-766, $$$)

A comparison of Saugatuck 2009 and 2010 data regarding SaaS buyer preferences indicates some significant shifts in the types of channels that buyers look to – or don’t look to. This Strategic Perspective uses the latest Saugatuck global SaaS survey research to examine which channels SaaS buyers are preferring to acquire solutions from, and why.

07-30-10 BI and CPM for Small and Mid-sized Enterprises: The Cloud Fits (L. Geishecker, 4 pages, MKT-765, $$$)

Recently, we published Strategic Perspectives on BI and CPM as they relate to the Cloud and Software-As-A-Service (SaaS). In this Strategic Perspective, we focus specifically on the intersection of SMEs and BI / CPM in the Cloud.

07-29-10 Europe Moves to The Cloud – SaaS Vendors Need To Tailor Strategies (R. McNeill, S. McNee, 6 pages, MKT-764, $$$)

Analysis of Saugatuck’s most recent global Cloud Business Solution / Software-as-a-Service (SaaS) survey results indicates that European executives are aggressively learning about and adopting SaaS as a key IT resource to “do more with less.” This Strategic Perspective presents Saugatuck data, analysis and insight on European SaaS adoption, and provides guidance regarding next steps for providers entering this market.

07-28-10 End Users, IT and the Cloud – Managing The Transition (M. West, 5 pages, MKT-763, $$$)

In this Strategic Perspective, we introduce a strategic framework for managing the Cloud transition. Beginning with the “Cloud Decision,” we examine the four key elements of the framework, “Planning,” “Procurement,” “Development” and “Production,” detailing both the business processes and the business context for this management approach.  This framework provides the outlines for a process model that can be adapted to the needs of enterprises and organizations of all sizes.

07-23-10 Private Clouds; A Taxonomy and Considerations (C. Burns, 5 pages, MKT-761, $$$)

In June, announcement of Nimbula's hybrid / private Cloud strategy and offerings, and the announcement of RedHat Cloud Foundations prompted increased discussion of the tradeoffs between Public and Private Cloud IT infrastructures (please see Research Alert "Nimbula and RedHat Spotlight Cloud Approaches and Debates", RA-748, published 24 June, 2010).

This Strategic Perspective looks at the fundamental differentiating characteristic of a Private Cloud and identifies two key attributes to be considered when evaluating Private versus Public Clouds. Having a reference framework and understanding key attributes is critically important for IT organizations. And, Cloud vendors must have a clear understanding of buyer evaluation criteria.

07-21-10 Business Process Utilities: The Next Generation of Sourcing (R. McNeill, A. Weidenbaum, 5 pages, MKT-759, $$$)

The world has never been as flat. Barriers to entry into the outsourcing market are getting lower. Providers can leverage cheaper IT provided by new cloud computing architectures. Regulations, standards and co-opetition are driving process maturation. The opening of global markets is allowing firms to access skilled labor and cheaper resources on an unprecedented basis. Meanwhile, traditional IT and BPO offerings are standardizing, benchmarking is common place and price is becoming the greatest factor in outsourcing selection.

Saugatuck's research indicates that outsourcing providers need to change their business models to drive differentiation and embark on the next generation of sourcing. Business Process Utilities (BPUs) may very well be the vehicle upon which outsourcing providers drive the regeneration of their outsourcing portfolios. BPUs are "service platforms that provide relatively standardized business processes, delivered from a one-to-many architecture and have many customers subscribing to these services". BPUs leverage shared platforms (both home grown and third party) to offer next-generation BPO services and solutions.

In this Strategic Perspective, we define what the characteristics of a BPU are and explain the drivers behind their emergence, and how service providers will give rise to BPU use.

07-21-10 Enterprise Applications in the Cloud: Getting Back to Basics (L. Geishecker, 5 pages, MKT-758, $$$)

Users need to be very cautious that they don’t rush into software decisions when moving to the Cloud. For example, user executives should not always assume that they will automatically stay with their current business applications provider for Cloud solutions. This Strategic Perspective is intended to help guide IT and business executives who are making and will make Cloud enterprise application decisions, so that they follow an efficient yet thorough process.

07-15-10 Desktop Virtualization Economics: Percolate Up and Trickle Down (C. Burns, 5 pages, MKT-757, $$$)

As a result of multiple factors, including continued marketing emphasis by Citrix and VMware, virtualization of desktops is increasingly a subject of evaluation and planning by IT organizations. However, customers are not always fully aware that in addition to the benefits that percolate up from a Virtual Desktop Infrastructure (VDI), there are also potentially significant costs that trickle down to the foundations of the IT infrastructure.

06-30-10 Key Issue Examination: What Problems Do Cloud BI and CPM Try to Solve? (L. Geishecker, 6 pages, MKT-754, $$$)

In a recent Strategic Perspective, we presented four Key Issues that we see as important areas of inquiry in understanding Cloud Computing as it relates to Business Intelligence (BI), Corporate Performance Management (CPM), and Analytics from the end-user and technology provider’s viewpoints through 2010 (please see Strategic Perspective, “Business Intelligence and Corporate Performance Management In The Cloud: Key Issues Framing the Research Agenda,” MKT-737, published 26 May 2010).

06-30-10 Collaboration in the Cloud: Tiers of Deployment and Engagement (M. West, B. Guptill, 6 pages, MKT-752, $$$)

Saugatuck’s ongoing research into Cloud business solutions has indicated three defined tiers of Cloud-based collaboration solutions:

06-30-10 Collaboration and Knowledge Work in the Cloud: Key Issues Framing the Research Agenda (B. Guptill, B. Kirwin, 4 pages, KI-751, $$$)

Saugatuck’s ongoing research into the progression of knowledge worker toolsets, including collaborative applications and productivity suites, has provided a number of insights into the early-stage, large-scale adoption of these SaaS/Cloud Business Solutions. Our research has also unearthed several Key Issues (see note 1) regarding the ongoing migration of Cloud-based collaboration applications that identify new opportunities to exploit the unique features, as well as the risks and maturation requirements of the collaborative Cloud ecosystem. This Strategic Perspective coalesces and presents those Key Issues that will help frame our ongoing research agenda in this space.

06-24-10 IT Warning Extended: Cloudy with a Change in Management (C. Burns, 4 pages, MKT-749, $$$)

In the second half of 2007 Saugatuck postulated that customer IT management would undergo two dramatic and simultaneous changes. These changes, an evolution from managing assets to supporting business processes, and a transition from “Do it myself” to “Do it for me”, were detailed in several pieces of published research (please see note 1). This Strategic Perspective uses some of our most recent research to illustrate that our 2007 projection was, and still is accurate, though possibly early at the time of original publication. We also offer insights into the implied opportunities for vendors of IT management tools and services.

06-17-10 Cloud Facilitators: A New Route to Market for Cloud Vendors (R. McNeill, 6 pages, MKT-747, $$$)

As Cloud Computing moves into the large enterprise and becomes an embedded part of IT and the business, customers are turning to a new wave of Cloud Facilitator (see Note 1) to help guide them through Cloud-based consulting, implementation and management challenges.

06-11-10 A Slice of SaaS Data: Buyers’ Technology Considerations Indicate Provider Value Propositions (B. Guptill, MKT-745, 6 pages, $$$)

This Strategic Perspective presents analysis of recent Saugatuck survey data regarding how various providers’ technological capabilities are ranked by buyers of Cloud Business Solutions (a.k.a. SaaS). We were not surprised by the types of considerations ranked most important by buyers – but we were surprised by several of the lower rankings.

06-04-10 Late From the Gate, But Passing in the Stretch: Business Growth in Asia-Pac Drives Strong SaaS Adoption (B. Guptill, B. Dooley, MKT-743, 6 pages, $$$)

Analysis of Saugatuck’s most recent global Cloud business solution / SaaS survey results indicate that the Asia-Pacific region, including India, China, Japan and Australia, may be leap-frogging ahead of US and European regions in terms of adoption, use, and business benefits enjoyed. This Strategic Perspective presents Saugatuck data and analysis on Asia-Pacific regional SaaS adoption, and provides guidance regarding next steps for users and providers.

05-31-10 Approaching a Taxonomy for PaaS: Developing for the Cloud (M. West, MKT-741, 5 pages, $$$)

Summary Platform as a Service (PaaS) is essentially a middleware-based platform to enable the development and deployment of Cloud Business Solutions. Each PaaS offering brings its own formula for delivering value. A PaaS offering may be based entirely in the Cloud or partly in the Cloud and partly on-premise. This Strategic Perspective looks at differing types of PaaS and provides a taxonomy for categorizing and understanding the relative characteristics – and potential value – of each.

05-28-10 Deciphering Cloud Workload Costs: Byte-ing Your Budget (C. Burns, MKT-740, 4 pages, $$$)

Saugatuck’s ongoing research shows that customer IT organizations are increasingly adopting Cloud Computing offerings to address two significant challenges: Managing costs and facilitating their support of an increasingly dynamic business / economic environment. In this Strategic Perspective, we offer insights into one potentially unrecognized cost factor for IT organizations to consider when selecting / evaluating Cloud Computing alternatives; and what this factor implies for vendors of Cloud offerings.

05-27-10 Browser Data Analysis Indicates Cloud Ecosystem Challenges for Microsoft (B. Guptill, 6 pages, MKT-739, $$$)

Saugatuck analysis of recent and historical browser development and usage data indicates that Microsoft has significant challenges to overcome among developers, including its partners, as the firm works hard to shift the world’s largest IT ecosystem as it moves toward a Cloud IT future. This Strategic Perspective reviews that data and analysis, and provides insight regarding likely effects and possible actions.

05-26-10 Business Intelligence and Corporate Performance Management In The Cloud: Key Issues Framing the Research Agenda (L. Geishecker, 4 pages, MKT-737, $$$)

Saugatuck’s ongoing research into the progression of Software-As-A-Service (SaaS) and Infrastructure-As-A-Service (IaaS) has yielded a number of insights into the challenges confronting adopters and vendors of Cloud Computing.

We have crystallized these challenges into a format which we call Key Issues – important questions and challenges that we see as framing user and provider strategies and actions, changing markets, vendor offerings and the business buyer’s evaluation, acquisition and utilization of those offerings (see Note 1 in the margin for Saugatuck’s Key Issue definition).

05-20-10 The Foundations of Cloud Enabled Business Process Outsourcing (R. McNeill, 6 pages, MKT-735, $$$)

The pillars that built and supported traditional BPO are under severe pressure. Labor arbitrage, old technologies, and traditional business models limit effectiveness. Cloud IT enables new, better, and more capable pillars upon which providers can and should be building. The future of BPO will be one of Cloud-based services developed or adapted to both traditional and emergent customer business needs and practices. In this Strategic Perspective, we look at why BPO is moving to the Cloud and how BPO will change (and be used) within the next few years as a result.

05-06-10 Gorillas In the Cloud: Applying Saugatuck’s “Master Brand” Model to Cloud IT (B. Guptill, B. Kirwin, 6 pages, MKT-732, $$$)

Master Brands are those vendors (and services providers) that dominate and influence IT marketplaces, technologies and/or user accounts. In this Strategic Perspective, we apply our re-examined Master Brand  framework to our five-layer Cloud IT ecosystem model, to see how the Master Brand concept applies to the emergent Cloud IT environment, and who might be current and future Master Brands in the Cloud.

04-30-10 Gorillas In Our Midst: Articulating Saugatuck’s “Master Brand” Model (B. Guptill, B. Kirwin, 4 pages, MKT-731, $$$)

As new market segments mature, certain vendors will emerge as dominant players with the capability to shape and establish direction for that market. In this Strategic Perspective, we re-examine and refine Saugatuck’s Master Brand framework and definitions, paying close attention to two key characteristics that “make” Master Brands: Comfort  and Control within IT ecosystems, from customers to channels to partners to technologies.

04-30-10 Masters of the Cloud: Assessing HP’s Enterprise Business Group (C. Burns, R. McNeill, B. Guptill, 4 pages, MBA-730, $$$)

This Strategic Perspective is the second in a series of examinations of Master Brand IT providers as regards their likely position and roles in Cloud IT. Herein, we assess the publicly-stated strategy, positioning, and capabilities of HP’s Enterprise Business group to influence and profit from the future of Cloud IT. Overall, HP recognizes opportunities on each Level of our Cloud Ecosystem model and could potentially achieve the status of Cloud Master Brand in hardware, software, networking services, IaaS and BPO. 

04-28-10 Corporate Performance Management’s Future In The Cloud (L. Geishecker, 4 pages, MKT-729, $$$)

According to recent Saugatuck research, Corporate Performance Management is not as high-priority as Business Intelligence from a plan to purchase and deployment perspective when thinking about business solutions in the Cloud. However, within the next two years, CPM should rise rapidly as a key priority – and therefore should not be ignored, whether as a business or IT end-user, provider or integrator.

04-30-10 IT’s Asset Management’s New Challenge: Cloud Computing Sprawl (R. McNeill, 6 pages, MKT-728, $$$)

Effective IT asset management strategies need to be implemented to manage Cloud Computing and “SaaS sprawl”. An IT and business administration nightmare is emerging as SaaS and Cloud vendor relationships proliferate in an opportunistic manner, creating a spaghetti environment of shadow sourcing relationships, off-contract purchases and security risks.

04-16-10 Key Business Changes And Applications Strategy Reassessment (B. Guptill, L. Geishecker, 5 pages, MKT-725, $$$)

IT and business executives cannot afford to ignore their applications strategy; the blueprint for all business management software should not be static. As business needs change, so must the supporting software. This Strategic Perspective identifies key business changes that organizations encounter, and how executives need to re-assess their business applications strategy(ies) to respond to those changes.

04-15-10 Novell and SUSE Linux: Not So Happily Ever After? (B. Guptill, 5 pages, MKT-724, $$$)

Developers, partners, and users of SUSE Linux as distributed by Novell have seen the company go through a stunning range of disruptive events within the past several weeks. The future of Novell, and therefore of the SUSE Linux distribution, is uncertain. This Strategic Perspective looks at the most recent events causing uncertainty for Novell, and the effects on Novell’s SUSE Linux distribution and markets.

03-31-10 HR Views of the Cloud: Increasing Business Effectiveness with SaaS (M. West, 4 pages, MKT-721, $$$)

Saugatuck’s 2010 survey of nearly 800 user executives worldwide – including significant drill-down sampling of HR, Finance and Procurement professionals – indicates that HR executives believe Cloud business (or SaaS) solutions can contribute to their success by helping them better manage their responsibilities:

03-31-10 Cisco’s New Router Enables Massive Change, Elicits Yawns (B. Guptill, 4 pages, MKT-720, $$$)

Cisco Systems Inc. on March 9, 2010 announced its new CRS-3 network routing system. The CRS-3 represents an important industry step toward three goals: Increasing the availability of bandwidth, which should reduce the costs of bandwidth, both of which should enable more widespread and faster growth of Cloud IT. This Strategic Perspective looks at Cisco’s CRS-3 network routing system announcement, and the likely market effects of the massive-scale bandwidth networking that it enables.

03-26-10 Visual Process Manager Signals Move to Workflow in the Cloud  (M. West, 4 pages, MKT-718, $$$)

On February 3, 2010, salesforce.com announced Visual Process Manager, a business-process-management-systems (BPMS) capability integrated into force.com to enable workflow-driven Cloud solutions. This latest announcement by Salesforce joins a series of BPMS announcements over the past year by major vendors:

03-26-10 Ten Cloud Computing Concerns for Service Providers (R. McNeill, 7 pages, MKT-717, $$$)

The service provider community – inclusive of IT outsourcers, business process outsourcers and systems implementation providers (SIs) – is the latest, traditional service line now realizing that the full impact brought about by the emergence of cloud computing. In fact, Saugatuck believes that the impact could be on a massive scale with disintermediation occurring across the value chain, from hosting to applications management changing any semblance to the established technology order.

But with change comes complexity for end user organizations – and opportunity for nimble innovators, solutions and services providers. This Strategic Perspective highlights ten cloud computing concerns shaping the business and market strategies of services providers.

03-12-10 Ageing IT Infrastructure: A Boon for Cloud Adoption? (B. Kirwin, B. Guptill, 5 pages, MKT-713, $$$)

Without a significant amount of fresh spending, many aspects of the average IT infrastructure are ageing well past their intended life spans. End-of-life cost issues such as maintenance, upgrades and downtime are increasingly taking center stage.  This Strategic Perspective looks at how the frustrating limitations of an ageing IT infrastructure, combined with a capital-poor financial environment, will conspire to drive adoption of Cloud infrastructure services for IT infrastructure “refreshes.”

03-05-10 Linux Fragmentation: Scenario Planning for Users, ISVs, and SaaS Providers (B. Guptill, Charlie Burns, 6 pages, MKT-711, $$$)

The Linux operating system market faces increasing and significant fragmentation. In this Strategic Perspective, Saugatuck examines a rational scenario of continuing and constant Linux fragmentation, and considers its effects on users and user IT organizations, Linux vendors, software developers and vendors, SaaS and other Cloud-based IT providers, and computing hardware designers and manufacturers.

02-26-10 Why Should CFOs Care About the Cloud? Because IT Sees it Differently (B. Guptill, 4 pages, MKT-709, $$$)

Finance organizations tend to have a peripheral or even tenuous relationship with Cloud Computing, from software as a service (SaaS) to IT infrastructure services to business outsourcing. Finance is rarely involved directly in Cloud acquisition, though it should be; and CFOs are rarely involved directly in Cloud management, though they also should be.

02-26-10 The Cloudy Future of IT Service Management (R. McNeill, C. Burns, 6 pages, MKT-708, $$$)

IT service management (ITSM) is one of the latest, traditional data center strongholds to be threatened by emerging, alternative approaches – i.e., Cloud and SaaS. This Strategic Perspective looks at key trends shaping the business and market strategies of ITSM software providers, and offers guidance to user organizations for evaluating traditional and alternative (SaaS-based) ITSM solutions.

02-23-10 Masters of the Cloud: Assessing Oracle Corp. (B. Guptill, B. McNee, 7 pages, MBA-705, $$$)

This Strategic Perspective begins a series of examinations of Master Brand IT providers as regards their likely position and roles in Cloud IT. We begin with the potential Cloud positioning and roles of Oracle Corp. based on its current strategy, positioning, and capabilities, and looking out five years to year-end 2014. Oracle, in sum, is well-positioned to profit from and influence the future of Cloud IT.

02-19-10 Sales Metrics and Best Practices in the Market for Cloud Solutions (M. West, B. McNee, 5 pages, MKT-704, $$$)

Earlier in February, Saugatuck reached out and conducted briefings with the senior executives from a number of Cloud solutions providers to gain insight into how they organizing and managing the sales process, as well as some of the key means that they are using to monitor and motivate their sales teams.  These in-depth briefings yielded clear patterns and insights in regard to:

02-19-10 Cloud Computing: Seeing and Managing Not-So-Obvious Costs  (C. Burns, 4 pages, MKT-703, $$$)

Saugatuck’s ongoing research shows that IT organizations are increasingly considering the use of Cloud Computing offerings to address their two most significant challenges: Managing costs and supporting an increasingly dynamic business / economic environment. In this Strategic Perspective, we offer insights into some potentially unrecognized criteria for IT organizations to consider when selecting / evaluating Cloud Computing alternatives; and what these criteria imply for IT vendors.

02-12-10 SaaS / Cloud Rip-and-Replace Strategies: Five Key Considerations (B. Guptill, L. Geishecker, 5 pages, MKT-701, $$$)

Enterprises that accept, adopt and implement Cloud Computing services will be more likely to assess the overhaul and replacement of their core business application portfolio. This does not necessarily mean that those enterprises will automatically replace enterprise applications with Cloud alternatives, or even SaaS offerings. But once the acceptance of Cloud Computing occurs within an environment, there are a number of key issues that should be evaluated to determine the fate of traditional business applications.

01-29-10 How Industry Groups Differ in Buying Preferences for Business Solutions (M. West, 5 pages, MKT-698, $$$)

Over the past couple of years, Saugatuck has set out to gain a better understanding of software investment across three dimensions of the buyer decision process: acquisition, deployment model, and licensing / payment arrangements.

In this Strategic Perspective, we look at results of our most recent global software adoption study by business solution category, comparing the results across industry groups to determine differences among their preference patterns. In particular, we address the following questions:

We specifically examine whether executives prefer to acquire business solutions as on-premise, hosted, SaaS or hybrid deployments – an especially important question in light of the increasing availability of Cloud-based options.

01-29-10 A Lack of Formal IT Indicates Higher Costs of SaaS and Cloud IT (B. Guptill, 4 pages, MKT-697, $$$)

We often write about the need for centralized IT or Finance organizations to gain and maintain control over the proliferation of SaaS and other Cloud-related IT. The reality is that fewer than 60 percent of firms worldwide have any sort of centralized dedicated IT management organization, and more than 60 percent of all firms formally allow non-IT executives and managers to acquire IT as needed.

01-22-10 Looking Back and Forward: An Assessment of Enterprise Social Computing Positions and Trends (M. Koenig, 4 pages, MKT-694, $$$)

In December of 2008, Saugatuck looked ahead at the key challenges facing social computing providers – particularly those looking to enter the enterprise market – in 2009. This Strategic Perspective reviews those positions against the realities of the market today, and looks at three key trends in Enterprise Social Computing for the year ahead:

01-19-10 Crowdfunding: Disrupting the IT Provider Investment Model (R. McNeill, B. McNee, 5 pages, MKT-691, $$$)

Mobilizing the power of the crowd through Crowdfunding to raise finance may prove savvy marketing for new emerging technology providers (e.g., Trampoline Systems) or large firms that possess an engaged network of customers/ fans (e.g., Apple). Benefits include involving a community right up front in the design and then management of a new product or company, not giving up direct investment control to a single or tightly knit group of investors and transferring risk of development to a community.

The emergence of Crowdfunding comes at a time when traditional VC investment is at an all time low. Emerging technology vendors like rising star Trampoline Systems are using it to raise money. However, it is still an unproven model in the technology market and significant regulatory obstacles exist, particularly, in the US . The immaturity of the model, substantial legal obstacles, and a lack of best practices including governance disciplines need to be addressed.

01-15-10 Infrastructure Augmentation: Decisions, Decisions, Decisions  (C. Burns, 4 pages, MKT-690, $$$)

Saugatuck believes that two of the most significant challenges facing IT organizations in 2010 will focus on managing costs and supporting an increasingly dynamic business / economic environment. In this Strategic Perspective, we offer insights into criteria for IT organizations to use when selecting / evaluating alternatives to augment existing infrastructures and achieve these objectives; and what these criteria imply for IT vendors.

01-14-10 Annual Perspectives on Open Source: From Fundamental Market Change to a New Frontier (B. Guptill, 4 pages, MKT-689, $$$)

In 2007, Saugatuck made a series of statements and issued several Strategic Planning Positions (SPPs) regarding growth, change, and the future of open source software. In December of 2008, we reviewed our positions and found most of our expectations had been met, and many had been wildly exceeded.

This Strategic Perspective reviews key 2008 end-of-year positions, provides an update on where things stand today, and offers our expectations as to where they are heading. Fundamental market changes are now in place, but they have resulted in a “new frontier” of opportunity and management challenges for vendors and users.

12-31-09 Evolving Business Application Preferences, Part 3: Payment Preferences (M. Koenig, R. Skoff, 6 pages, MKT-686, $$$)

This Strategic Perspective looks at buyer preferences with regard to paying for business applications software, comparing the traditional license plus maintenance approach with subscription and value-based models. This includes data and insights by company size and region from recent global research on business applications software.

We address the following questions:

12-30-09 Transformation and Growth: IT Sourcing Strategies and Practices for 2010 (R. McNeill, B. Guptill, 5 pages, MKT-684, $$$)

Even with a shrinking economy in 2009, we saw a short term dip for the outsourcing market. However, 2010 looks more positive as we anticipate user organizations worldwide to spend aggressively on hardware, software and services and as they increasingly look to service providers to drive new business capabilities. This Strategic Perspective looks at how IT sourcing, especially the provisioning and management of IT services, will change in 2010, and the effects that these changes should have on user and IT vendor management.

12-23-09 SAP’s 2009 Influencer Summit: Four Factors for a Clear Path Forward (M. Koenig, B. Guptill, 5 pages, EVT-683, $$$)

Earlier this month, SAP hosted its Influencer Summit in Boston , Massachusetts to communicate important new messages about company and solution strategy that it summarized as “The Clear Path Forward.”  Saugatuck was invited to participate in the conference including a specially-arranged deep-dive discussion about Business ByDesign on Wednesday.

12-21-09 Evolving Business Application Preferences, Part 2: Deployment Preferences (M. Koenig, R. Skoff, 6 pages, MKT-679, $$$)

This Strategic Perspective is the second in a series that focus on evolving buyer preferences with regard to business applications software. Saugatuck research has focused for years on helping user and vendor organizations and decision influencers understand key dimensions of the buyer decision process: acquisition, deployment model, licensing, and payment alternatives.

This Strategic Perspective looks at buyer preferences for business applications software: behind-the-firewall, on-premise deployment, and alternative deployment models. This includes data and insights by company size and region from our global research on business applications software.

We will address the following questions:

12-17-09 Cloud Computing: Business and IT User Perceptions Evolve and Mature (C. Burns, 4 pages, MKT-678, $$$)

Ongoing Saugatuck research throughout 2008 and much or 2009 has consistently shown that most business and IT users perceive Cloud Computing as both potentially beneficial and probably challenging. However, our most recent research clearly shows that users are developing much more informed and realistic views of Cloud Computing, including a deeper understanding that Cloud is not just about saving money. In this Strategic Perspective, we offer insights into how user perceptions of Cloud Computing are evolving and maturing, and what this might for vendors of Cloud offerings.

12-11-09 Key Open Source Influences in 2009 and 2010: Oracle and Google (B. Guptill, 5 pages, MKT-676, $$$)

2009 was a year when the open source revolution ran head-on into maturity, and open source software realized its key role as a commercially-leverageable asset for multi-billion-dollar software firms. In this Strategic Perspective, Saugatuck looks at two key influences in open source software in 2009 – Oracle and Google – and offers a look forward as to how their 2009 efforts will affect developers, software firms, and users in 2010.

11-30-09 Evolving Business Application Preferences (Part 1): Best-of-Breed or Suite (M. Koenig, R. Skoff, 6 pages, MKT-672, $$$)

This Strategic Perspective is the first in a set of three that will focus on evolving buyer preferences with regard to business applications software. Over the past couple of years, Saugatuck has set out to gain a better understanding of software investment across three dimensions of the buyer decision process: acquisition, deployment model and licensing / payment arrangements.

In particular, in this Strategic Perspective we re-examine the age-old question as to whether executives prefer to acquire business applications as part of an integrated suite, or via a “best-of-breed” approach – an especially important question in light of emerging Cloud-based options. We also look at the overall results of our global study by software application category comparing the results across regions and company size to determine differences among preferences.

In particular, we address the following questions:

11-30-09 Cloud Infrastructure Expectations: Europe Ahead of North America (H. Hosseini, F. Sempert, B. Guptill, B. McNee, 5 pages, MKT-670, $$$)

This Strategic Perspective continues Saugatuck’s analysis of Cloud Infrastructure adoption, adding regional perspective and insight – as we compare and North American executives assessment concerning when Cloud Infrastructure services will become mainstream vs. their European counterparts.

11-25-09  Dreamforce 2009: Salesforce Targets the Entire Enterprise (M. Koenig, 5 pages, EVT-669, $$$)

Last week Salesforce held its seventh annual Dreamforce Conference at the Moscone Center in San Francisco , CA , with approximately nineteen thousand customers, prospects and partners in attendance, double last year’s record-setting attendance.  Saugatuck again attended the conference, and spent two and one-half days listening to keynotes, participating in analyst-only presentations, meeting one-on-one with executives and talking to Salesforce customers. 

Salesforce and its partners and customers made several significant announcements at Dreamforce 2009.  Most notable are the introduction of Salesforce Chatter, and the announcements by Salesforce partners BMC Software and Computer Associates that they have built cloud-based solutions using the Force.com platform. 

11-20-09 Google Chrome OS: Enabling Fundamental Change Without Requiring Fundamental Change (B. Guptill, 5 pages, MKT-667, $$$)

Google has taken the wraps of its Chrome OS. Google’s OS strategy is fundamentally different from previous OSes, including the Ubuntu Linux OS on which Chrome is partially based, and specifically targets netbooks with speed, simplicity and security as its design points.

11-18-09 Integration as Key to SaaS Adoption and Provider Opportunity (C. Burns, 5 pages, MKT-665, $$$)

As originally projected by Saugatuck in April 2006, and later updated in 2007, 2008 and earlier in 2009, use of Software-as-a-Service (SaaS) offerings continue to evolve from point solutions to ever more integrated business process solutions. Not surprisingly the challenge of integrating these SaaS offerings with existing workloads is also evolving from simplistic, albeit, painstaking data integration to more complex process and workflow integration. This Strategic Perspective focuses on user requirements for integration, and offers insights for SaaS providers when evaluating how to accomplish integration of their offerings.

11-06-09 New FTC Ruling Raises Content Management and Compliance Issues for Enterprise Social Computing (A. Goldberg, M. Koenig, 4 pages, MKT-663, $$$)

New FTC rules focus on social media endorsements and the content of communications, marking the beginning of more government scrutiny in this space. As the promise of integrating enterprise business data with social media data gets more fully realized, more and more attention will be placed on the content collected by enterprises and stored in enterprise systems, along with the privacy issues they represent. In this Strategic Perspective, we look at the larger issues raised by this regulation and explore the implications for technology vendors and end users.

10-30-09 Mitigating Risk in Cloud-Sourcing and SaaS: Certifications and Management Practices (R. McNeill, M. West, 5 pages, MKT-660, $$$)

Saugatuck is receiving a growing number of requests from internal audit teams concerned about the implications of Cloud Computing to company, data, policies and procedures. Saugatuck has found that the majority of organizations are not prepared to put the appropriate policies and procedures in place and formalize best practices in Cloud management.

10-30-09 Cloud Computing: Managing the Gathering Storm (C. Burns, 4 pages, MKT-659, $$$)

Most of the published research pertaining to Cloud Computing focus on the user IT organization’s perception of potential benefits and/or technical challenges associated with adopting a Cloud offering. While the perceived technical challenges are real, Saugatuck believes that there are largely unheralded management challenges which are likely even more daunting.

This Strategic Perspective focuses on the non-technical management challenges that IT organizations must face as a result of adopting Cloud offerings. We offer insights for IT management on the nature of the challenges and recommendations for overcoming them, including:

10-29-09 Expected Benefits of Cloud Infrastructure: Less than 100 Employees (B. Guptill, R. Skoff, 4 pages, MKT-658, $$$)

This Strategic Perspective serves as an updated analysis on core business value expectations among firms, based on a new comparison of companies with less than 100 employees and all other firms.   These companies, with small (or no) IT departments and budgets, have much different expectations of how the implementation of Cloud infrastructure will benefit their company than do larger firms.

10-23-09 Oracle, Java, MySQL, and Solaris: Where’s the Profit Going to Be? (B. Guptill, 5 pages, MKT-656, $$$)

Oracle’s acquisition of Sun is approaching completion.  Significant questions and issues remain, however, regarding the role of Sun’s open source software portfolio in the new company. This Strategic Perspective examines key challenges for Oracle to see how it is likely to profit from Sun’s open source business.

10-16-09 Cloud Computing Poised To Transform The Desktop Outsourcing Market (R. McNeill, B. McNee, 6 pages, MKT-654, $$$)

Cloud Computing provides the next route to help reduce the cost of IT infrastructure. Savings can be made in hardware, software and labor productivity while development teams and the business will see value in the greater flexibility and speed to market that the new applications and services provide. But Cloud computing also provides a threat to stability and standardization. Many social technologies, mobile devices and SaaS technologies that are either free or low cost will bypass corporate IT and outsourcing partners, leaving a myriad of contract support challenges and potential user frustration. 

10-09-09 Cloud Computing Research: User Challenges and Concerns (M. Koenig, C. Burns, 4 pages, MKT-651, $$$)

Most research into the growing popularity of Cloud Computing focuses on user perception of likely benefits and on user concerns about technical or operational aspects. Not unlike other firms, Saugatuck has been examining the expected benefits and concerns associated with Cloud Computing solutions. And, our research has shown that while analyzing the perceived benefits of adopting cloud computing is critical, user concerns must not be overlooked.

Saugatuck’s most recent research digs deeper into user concerns by looking at the difference between the opinions of IT and non-IT executives with regard to the challenges they expect to face as they implement Cloud Infrastructure solutions.

In this Strategic Perspective, we will address the following questions:

09-30-09 Cloud Computing Research: Users Seek More Than Just Cost Savings (M. Koenig, C. Burns, 4 pages, MKT-648, $$$)

Even though Saugatuck research consistently indicates that cost savings are a key expected benefit driving adoption of cloud-based infrastructure solutions, we also see that cost savings are by no means the exclusive driver of investment in Cloud Computing overall. The decision to buy hinges more and more on strategic business factors.   

In this Strategic Perspective, we look more closely at that research to address the following questions:

09-30-09 Building Value Propositions for Cloud Infrastructure: IT Benefits (B. Guptill, 5 pages, MKT-646, $$$)

Analysis of Saugatuck’s most recent survey data of Cloud Infrastructure service buyers and users reveals three tiers of core business value expectations among most firms, and a significant set of differences between the largest enterprises and all other firms.

09-24-09 Raising a Question: Is Open Source Killing The Goose That Lays Golden Eggs? (B. Guptill, 5 pages, MKT-644, $$$)

Saugatuck has reported on the significant change and growth in the adoption of open source software by users and by software vendors (please see Strategic Research Report SSR-540, “Power, Speed and Assimilation: Open Source Changes the Industry, and the Industry Changes Open Source,” published 18 Dec. 2008). We see open source as a key phenomenon driving some of the most significant changes in IT today, both within and beyond traditional software.

09-18-09 Cloud Computing Reality: End-Users will Make End-Runs Around IT (C. Burns, 4 pages, MKT-642, $$$)

This Strategic Perspective looks at a typically under-examined scenario of Cloud Computing adoption: The end-run by end-users to avoid internal IT involvement. We compare the nascent status, adoption, and impacts of Cloud Computing to those of Client-Server Computing, and offer recommendations to IT executives and managers for maximizing the resulting potential benefits of Cloud Computing.

09-11-09 A Slice of SaaS Data: Technology Capabilities Confirm SaaS’ Enterprise Positioning (B. Guptill, R. Exler, 4 pages, MKT-640, $$$)

What is important to users and buyers in traditional IT is also what is important to them when it comes to software-as-a-service (SaaS). Recent Saugatuck research indicates that decision makers consider the availability of backup/recovery, disaster recovery, software development platform/tools, Web Services API, and SLA compliance data are the most important into technology considerations for SaaS selection. These top five considerations clearly fall into two categories – recovering from application problems, and developing/customizing the SaaS solution for integration into the business.

In this Strategic Perspective, we provide insights into the technology considerations for SaaS selection amongst enterprises, and the resulting implications for vendors. The insights are based on findings from our worldwide web survey conducted after the current economic recession began, with more than 1700 respondents indicating how important specific technology capabilities are to them in selecting SaaS solutions.

09-09-09 Cloud Services Transform Traditional Outsourcing (B. McNee, R. McNeill, 6 pages, MKT-638, $$$)

Cloud computing outsourcing alternatives (including SaaS) are substantially reshaping the way technology-enabled services are purchased and used. This in turn is fundamentally shifting the IT outsourcing landscape, creating new opportunities that grow from established, traditional categories of IT and business process outsourcing. These emergent shifts – and opportunities – include the following:

1. From Infrastructure Outsourcing to Infrastructure-as-a-service (IaaS) and Platform-as-a-Service (PaaS);

2. From Application Outsourcing to PaaS and SaaS; and 

3. From Business Process Outsourcing to Cloud Enabled Business Services

08-31-09 SaaS Providers Build Ecosystems Through Non-Traditional Channel Partners (M. Koenig, 6 pages, MKT-636, $$$)

Traditional ISV channel partners (see Note 1) are re-examining their business models as Software as a Service (SaaS) establishes itself as a mainstream computing phenomenon.  However, they might not be changing fast enough: Saugatuck is seeing a shift in the nature of the channel itself, as emerging SaaS providers establish new and unusual channel relationships to reach their target markets.

This Strategic Perspective will use three recent examples of this phenomenon to examine the rising importance of non-traditional channel partners to the growth of SaaS.  These examples highlight at least four different approaches to channel relationships that reach beyond typical IT ecosystem players such as VARs and systems integrators.  These include financial services providers, industry associations, “big box” retail, and government agencies. 

We will also address the following key issues with regard to non-traditional channel partners:

08-28-09 Senior Executives Tell Saugatuck: When Will Cloud Workloads Be Mainstream? (C. Burns, A. Weidenbaum, 4 pages, MKT-635, $$$)

As part of our Cloud Computing research program, Saugatuck recently gained deep dive insights from 37 senior IT and business executives regarding the emergence and readiness of Cloud capabilities for real-world IT. The executives all participated in MIT’s Technology Review series of Cloud events for CIOs and similarly-ranked user executives. This Strategic Perspective focuses on their projections for when Cloud will be considered “mainstream” enough to be used for standard IT workloads, including web serving, application development, batch processing, and OLTP.

08-21-09 Review and Reassess: Software Vendors and Open Source in 2009 (B. Guptill, 5 pages, MKT-632, $$$)

In preparation for our late 2008 research study of open source software, Saugatuck analysts interviewed 50 open source vendors regarding three key areas:

08-21-09 A Slice of SaaS Data: Business Capabilities in SaaS Solution Selection (R. Exler, B. Guptill, 4 pages, MKT-631, $$$)

Saugatuck research into the relative importance of solution capabilities in software-as-a-service (SaaS) selection indicates that what decision makers consider as most important are security, integrating and customizing business workflows, applications management, and collaboration. However, these considerations are not inherently different from selection criteria of any software solution in today's market. Our research therefore continues to support the assertion that SaaS is, indeed, considered “mainstream” IT.   

08-14-09 Messaging on the Cloud: Core Themes and Imperatives for Providers (M. West, 5 pages, MKT-629, $$$)

Saugatuck’s recent global web survey identifies the core benefits and concerns that executives have regarding Cloud Computing deployment and use.  Cost-based benefits account for four of the top five business benefits expected from Cloud deployment. Security far and away tops the list of Cloud deployment concerns, followed distantly by concerns regarding integration, standardization, ROI, and performance.  These expected benefits and concerns map closely with previously-expressed expectations regarding SaaS – and almost any other emergent, potentially-disruptive (and now mainstream) IT.  

08-07-09 Investigating Key Beliefs Behind “SaaS Inertia” Among Legacy ISVs (R. McNeill, B. Guptill, 6 pages, MKT-627, $$$)

While our ongoing market research indicates that a significant percent of legacy ISVs are either investigating or planning to move to SaaS business models over time, Saugatuck sees the trend of legacy ISVs actually implementing or embracing SaaS as relatively underwhelming thus far.

While a number of ISVs are aggressively pursuing SaaS strategies, many leading ISVs have had strategy teams in place for more than three years without tangible results thus far, or have merely formed groups to help define responses to SaaS. They have researched SaaS applications and product features, and hypothesized ranges of entry strategies (including buy versus build) required to respond to the growing customer movement from client server applications.  

Some pundits view this as a state of inaction or hesitation in the part of legacy ISVs to truly move to SaaS. We see and hear increasing references to ISV “inertia,” implying that there is little or no movement by most toward SaaS. However, we also recognize it may make just plain common sense for ISVs to be careful.

07-31-09 Cloud Infrastructure Research: Impact of Cloud Infrastructure Solutions on IT Planning and Management (M. Koenig, A. Weidenbaum, 6 pages, MKT-625, $$$)

In Saugatuck’s recent executive-level survey on Cloud Computing, we questioned senior business and IT executives on the degree of impact that Cloud Infrastructure solutions are expected to have on IT planning and management.  This Strategic Perspective addresses the following questions:

·      Which Cloud Infrastructure Solutions will have the greatest impact?

·      How does expected impact vary by company size, industry segment, and  region of the world?

Overall, the results indicate that storage and retrieval solutions, for both data and documents, are expected to have the greatest impact, with batch and OLTP processing solutions expected to have the least impact.  Solutions around application development and testing fell in between, in spite of the extensive discussion around them in the marketplace today.

The results also point to specific “sweet spots” for Cloud Infrastructure solutions, some of which fly in the face of conventional wisdom.  For example, the solutions appeal more to larger companies with between 1,000 and 25,000 employees, than to smaller or mid-market companies.  Public Sector and Retail companies, traditionally viewed as technology laggards, have greater expectations for Cloud Infrastructure solutions, along with traditional leaders such as High Technology.  And IT Executives appear to be more optimistic about the impact of Cloud Infrastructure on their operations than are their counterparts in other areas of the business.

In short, Cloud Infrastructure is expected to have a significant impact – and in some cases may already be having an impact – in many organizations.  Providers, however, will have some challenges to overcome.  Chief among them will be determining the direction of expected impact – positive or negative – and then modifying solutions and market messaging accordingly.

07-31-09 Cloud Computing Key Issues Revisited – Part 2 (M. West, C. Burns, 5 pages, KI-624, $$$)

In late August, 2008, Saugatuck published an initial list of Key Issues (see Note 1 in the margin for Saugatuck’s Key Issue definition) related to Cloud Computing. (See Strategic Perspective KI-499, Cloud Computing: Five Key Issues Framing the Research Agenda, published 29Aug08.) These Key Issues are the important questions and challenges that we see as framing vendor and user strategies and actions, changing markets, vendor offerings and the business buyer’s evaluation, acquisition and use of these offerings.

Since that time we have continued to focus primary and secondary research on the evolution of Software-as-a-Service (SaaS) and the emergence of Cloud Infrastructure offerings. This ongoing research has yielded important additional insights.

07-30-09 Collaborative SaaS Insights: Tiers of Deployment Over Time (B. Guptill, 6 pages, MKT-623, $$$)

Since 2006, Saugatuck surveys of SaaS usage have shown that “Collaborative” applications – e.g., email, conferencing, project management – are the leading SaaS applications being deployed worldwide. The application types range from task-oriented point solutions that can be deployed and deliver benefits with little integration, to full-immersion solutions that enable and require significant integration, security, and management.  While all types of Collaborative SaaS applications are widely and broadly deployed, there are tiers of collaborative applications that tend to get deployed earlier, and more broadly, than others.

07-24-09 Cloud Infrastructure Research: Decision Makers – Who are They? What do They Consider Important? (M. Koenig, A. Weidenbaum, 5 pages, MKT-621, $$$)

Saugatuck recently conducted an executive-level survey examining buyer attitudes toward Cloud Infrastructure Solutions in their businesses.  One of our goals was to find out what executives consider to be the most important drivers and inhibitors of Cloud Infrastructure solutions. 

Our web survey reached 670 senior business and IT executives to ask them about their perceptions of the business benefits and key concerns about Cloud Infrastructure solutions, as well as their plans for leveraging these solutions in their business.  Forty-two percent identified their role as the decision maker when asked about their involvement in their company’s strategy and planning around the deployment of new technology 

This Strategic Perspective will examine the data and seek to address several key questions about these decision makers, with a focus on: Who are the decision makers? What do they consider to be the biggest benefits of deploying Cloud Infrastructure solutions? What do they consider to be the biggest concerns about deploying Cloud Infrastructure solutions?

07-17-09 Cloud Computing Key Issues Revisited – Part 1 (C. Burns, M. West, 4 pages, KI-619, $$$)

On 29 August, 2008, Saugatuck published an initial list of Key Issues (see Note 1 in the margin for Saugatuck’s Key Issue definition) related to Cloud Computing. These Key Issues are the important questions and challenges that we see as framing vendor and user strategies and actions, changing markets, vendor offerings and the business buyer’s evaluation, acquisition and use of these offerings.

Since that time we have continued to focus primary and secondary research on the evolution of Software-as-a-Service (SaaS) and the emergence of Cloud Infrastructure offerings. This ongoing research has yielded important additional insights.

07-16-09 Deployment of SaaS Business Applications: SMEs lead over Large Enterprises, but Size is not the Factor (B. Guptill, B. McNee, 7 pages, MKT-618, $$$)

Last year, Saugatuck research indicated that small and mid-size enterprises (SMEs) tended to be among the most aggressive adopters of SaaS overall. And earlier this year, research with Finance executives indicated strong and growing deployment of SaaS for core Finance and associated core business applications. Now, we see SMEs continuing this trend, moving ahead of their large enterprise (LE) counterparts in terms of current adoption and deployment rates of SaaS for core business applications.

Survey research conducted at the end of 2008 indicates that across the full spectrum of core business application areas, an average of 40 percent of SMEs and 37 percent of LEs are using SaaS in one way, shape or form. But when we combine current deployment and planned deployment through 2011, these figures are projected to rise to 65 percent and 57 percent, for SMEs and LEs respectfully – indicating continued strong demand despite the current economic downturn.

06-30-09 Upfront Cost-and-Speed are Top-of-Mind – and Driving Channel Roles (B. Guptill, 6 pages, MKT-614, $$$)

Previous ST research investigated how users and buyers want to acquire SaaS and the changing roles of channel partners and providers.

This Perspective provides insights regarding what business needs are most important to buyers as they evaluate and select SaaS providers. Future Perspectives  will examine similar technological considerations as well. But in sum, the most important business issues in SaaS provider selection are implementation cost and speed. Factors such as payment and pricing methods, or relationships with providers and implementers, are well down executives’ ranked selection factors.

06-29-09 Social Business Analytics Solutions Begin to Take Shape (M. Koenig, 4 pages, MKT-613, $$$)

Recently, Saugatuck identified an additional challenge to the broad adoption of Enterprise Social Computing (ESC) solutions that we are calling social business analytics.  For ESC to realize its full potential over the course of the next three years, users and vendors must design and implement social business analytic systems and strategies to take advantage of the explosion of social business information currently being created.  (Please see Strategic Perspective MKT-604,”Value from Social Business Information Requires Social Business Analytics, published 29 May, 2009.)

This month, two leading vendors – one from the business analytics side and one from the social networking community side – released analytics solutions that represent credible first steps toward the type of social business analytics systems that we envision evolving over the next two to three years.  In doing so, they are helping their customers establish the ROI of ESC initiatives, and make better decisions about their next investments. 

06-29-09 SaaS Vendor Partnering: Navigating the Channel (C. Burns, 5 pages, MKT-612, $$$)

As SaaS becomes part of mainstream IT, traditional channel partners from VARs to SIs to consulting firms are looking for effective means to partner with SaaS providers. At the same time, SaaS providers are striving to understand the potential benefits of channel partners and expand into and take advantage of traditional IT channels. The current state of flux of SaaS go-to-market strategies indicates a wide-open marketplace for providers – largely due to the absence of a leading channel strategy. However, our research indicates that one strategy will not fit all types of providers. In fact, we see five types of SaaS providers, each of which would benefit from a somewhat different channel strategy.

06-25-09 Billing Solutions for the Cloud: Monetization or Muddling Through? (M. West, 5 pages, MKT-611, $$$)

Billing capability is an important ingredient in business success and sustainability in the Cloud.  Effective billing and payment solutions are essential in 1) enabling monetization, 2) providing agility in competitive situations, 3) managing the channel and 4) reducing operational costs. 

Yet many providers lack complete solutions, relying on homegrown, paper- and spreadsheet-based systems that cannot adequately handle large-scale growth, enable quick competitive responses, nor the merging of capabilities arising from M&A.  And many Cloud infrastructure providers either lack adequate solutions or rely on solutions adapted from prior applications-hosting business models.

06-18-09 Intel: The New Colossus of IT? (B. Guptill, 5 pages, MKT-609, $$$)

With Moblin and Wind River, Intel is effectively positioning itself for life outside of and beyond Microsoft Windows. Intel will have, under its own control, viable and well-established alternatives for Windows in practically every aspect of CPU usage, manufacture, and development. Intel thus puts itself in position to compete with, and possibly surpass, Microsoft in emergent mobile, embedded device and unified communications markets.

06-10-09 Ten Core Disciplines Required for Cloud Management (R. McNeill, B. Guptill, 5 pages, CIO-606, $$$)

The shift in acquisition of business and IT resources from on-premise, licensed software solutions to Software as a Service (SaaS), and from on-premise data center infrastructure to Public and Private Cloud deployment, will transform the information technology sector. This transformation will result in a multi-level ecosystem, ranging from technology suppliers through Cloud Computing providers to business services providers (see Strategic Perspective, Harnessing the Cloud: A Model for the Emerging Cloud Computing Ecosystem, MKT-508, 23Sep08).

For many organizations, the most common mistake in transitioning to Cloud based computing is assuming that it is all about the technology. Organizational issues and people continues to provide the majority of costs and equally the majority of obstacle to change (please see Saugatuck Strategic Report “Key Lessons Learned: Navigating from Traditional ISV to SaaS Provider,” STR-357, 15Jun07).

05-29-09 Value from Social Business Information Requires Social Business Analytics (M. Koenig, 5 pages, MKT-604, $$$)

Recently, Saugatuck identified seven technology, management and cultural challenges to the broad adoption of Enterprise Social Computing (ESC) solutions (see Saugatuck Research Report Bridging the Gap: Achieving the Promise of Enterprise Social Computing, SSR-571, 11Mar09). Our research since has identified an additional challenge – an outgrowth of the others – which we are calling social business analytics. For ESC to realize its full potential over the course of the next three years, users and vendors must design and implement social business analytic systems and strategies to take advantage of the explosion of social business information currently being created.

However, the differences between the data currently being created and stored in traditional enterprise business systems and the social business data being created and stored through the use of social applications – from Facebook or LinkedIn, Jive or Neighborhood America, Twitter or Friendfeed, for example – are significant. These differences pose a challenge to the design and implementation of social analytics system, which will be costly and complex using today’s systems. As such, a new approach to analytics from both users and vendors is called for. Otherwise, the business benefits of Enterprise Social Computing are likely to disappoint users, and to stunt its acceptance and use. This approach will evolve over the next three years, led by in-the-cloud analytic solution providers.

05-29-09 A Slice of SaaS Data: SMB Adoption Plans Grow in AsiaPac & Euro Regions (B. Guptill, 6 pages, MKT-603, $$$)

Examination of Saugatuck SMB-specific SaaS survey data indicates strong short-to-mid term adoption plans by firms in Asia-Pacific and Europe . US SMBs show broad existing SaaS use and expansion – but indicate much lower levels in the planning stage. And with a couple of exceptions, European and AsiaPac SMBs indicate emerging SaaS usage and expansion similar to US SMB levels.

05-22-09 Crowdsourcing and Open Innovation (R. McNeill, B. Guptill, M. Koenig, 4 pages, MKT-601, $$$)

Extended ecosystems of technology partners, service providers and contractors provide business and IT functions that would otherwise be performed internally. Many have grown to the point where a user organization’s networks, including both customers and suppliers, are seen as a source of competitive advantage.

05-21-09 Data Centers: Green Evolution & Transition (C Burns, 6 pages, MKT-600, $$$)

Much of 2008 taught average citizens fundamental supply-and-demand economics in energy pricing. Abnormally high prices for gasoline and heating oil had repercussions in the prices of almost all goods and services and motivated changes in everything from thermostat settings to driving habits. Arguably, the greatest impacts were felt in the utility expenses for data centers.

05-08-09 Creating IT Organization Structures That Facilitate the Adoption of New Technologies – Part 2  (B. Guptill, S. Medina, 4 pages, CIO-597, $$$)

IT organization structures get “stale” over time. They are typically designed and put in place to manage specific types of technologies and operations. But that type of practice limits organizations’ abilities to optimize new and emerging technologies that enable change and improvement for IT (and for business organizations).

05-06-09 Creating IT Organization Structures That Facilitate the Adoption of New Technologies - Part 1 (B. Guptill, S. Medina, 6 pages, CIO-595, $$$)

IT organization structures, like dairy products, should have expiration dates. All too often, stale organization structures end up spoiling IT leaders’ plans to adopt new technology solutions. Some structures are extremely rigid and have been in place for so many years that they are almost part of a corporation’s furniture. At the other extreme, some structures are so overly flexible and loose that it’s difficult to determine who’s accountable for anything. In those organizations, trying to ascertain who is leading the adoption of new technologies is like trying to nail Jello^TM against a tree. And some IT organization structures have grown in span and in the number of layers as a result of the de facto method for dealing with new technologies - which is to add a new team whenever a new technology is acquired.

04-30-09 Research Inquiries: Open Source Providers, Models and Markets (B. Guptill, 4 pages, MKT-594, $$$)

Saugatuck has been fielding a series of inquiries from our research clients as well as media regarding open source software. As noted in our previously-published research (see Note 1), open source is being assimilated rapidly and deeply into mainstream IT, especially by independent software vendors (ISVs) and by such Master Brand software vendors as IBM and Microsoft. This assimilation is being driven by significant benefits to vendors including faster and less-expensive development, improved standardization, and broader appeal to customers and partners. Awareness of such potential benefits has brought a wave of small, open-source-based startups to market – most of which are unlikely to survive through the current recession.

04-30-09 SaaS Channel Research, Part 2: How Can ISV Channel Partners Differentiate in the Brave New SaaS/Cloud World? (M. Koenig, M. West, 5 pages, MKT-593, $$$)

Recent Saugatuck research has shown that executives prefer to buy SaaS through the channel.  Indeed, the channel will be critical to the continued growth and penetration of SaaS in the market, with the development of value-added services a key success factor for the channel partner.  But what types of value-added service offerings will be most compelling in the SaaS cloud world?

Research from our Global SaaS Survey suggests that these offerings fall into two categories: domain expertise-based services and IT management-based services.  Based on this research, Saugatuck posits that over time, channel partners will choose one of these two areas as the foundation on which to differentiate their value and their services – choosing either to develop horizontal or vertical domain expertise, or to develop a capability to manage a portfolio of SaaS offerings on behalf of their customer base. 

04-30-09 Safety First: SaaS Survey Shows Data Concerns Rule (C. Burns, 5 pages, MKT-592, $$$)

Few people familiar with information systems technology question that Software-as-a-Service (SaaS) is continuing to increase in popularity. Saugatuck projects that user adoption of SaaS offerings will grow substantially faster than traditional on-premise offerings through 2012. Saugatuck research has shown that multiple attributes of the SaaS phenomenon, such as acquisition and use, differ by geographic region (see Research Alert “A Slice of SaaS: Worldwide Channel Preferences Show Mainstream Trends”, RA-570, 04Mar09.) However, some user views of SaaS are quite consistent across the geographies we surveyed.

04-17-09 SaaS Channel Research, Part 1: Subtle, Deadly Change for ISV Channel Partners? (M. Koenig, M. West, 5 pages, MKT-588, $$$)

Software as a Service (SaaS) and Cloud Computing are disrupting the business model of traditional ISV channel partners.  Saugatuck research shows that many of these channel partners are in danger, while those who succeed will do so by embracing the SaaS/Cloud model, even to the extent of beginning to resemble SaaS/Cloud providers themselves.

Our research into buyer preferences indicates that the channel is critical to the continued growth of SaaS.  This is particularly true for SMB buyers, who show a marked preference for buying IT, including SaaS, through channels rather than directly from vendors.  Even in the large enterprise market, there is a significant percentage of executives who wish to purchase SaaS through partners.  Last, executives view non-traditional channels such as business services providers or online marketplaces as viable sources from which to acquire SaaS solutions.

Channel partners themselves, however, are polarized as to the impact SaaS is having on their business.  At one extreme are those whose experience is telling them that SaaS will not have a significant impact on their business – their customers are not yet asking for it, and the deployment model doesn’t fit their customers’ businesses.  At the other extreme are channel partners who have embraced SaaS in their own businesses, and who believe that in a market that values the quality of a solution, no solution should be excluded solely on the basis of its deployment model.

Because of the importance of reaching new customers – and supporting them – to the growth of SaaS/Cloud (particularly in the current economic climate), Saugatuck believes that we will be seeing a strong increase in channel-focused outreach, positioning and marketing by SaaS/Cloud providers.  These providers will be looking to build out strong partner ecosystems and will look to appeal to the channel by offering healthy margins, billing support and connections to a plethora of potential solution partners – as well as potential customers.

04-08-09 Homeshoring and Telework: Guidance for Global Services Delivery (R. McNeill, B. Guptill, 6 pages, MKT-585, $$$)

Homeshoring will complete the decade-long build-out of the Global Delivery Model (GDM). GDM emerged in the late 90s with the rise of India as an offshore destination for projects like Y2K and modernization of legacy applications. Much of the value proposition centered on labor arbitrage, increased offshore labor supply due to lowering of service trade barriers and the global chase for skilled labor in response to a period of high growth, strong OECD currencies and low inflationary markets.

Subsequent evolution focused on development of “hub and spoke” onshore, nearshore and offshore delivery teams that maintain and develop an increasing breadth and depth of services including applications, infrastructure and business processes; and as arbitrage opportunities reduced in a supply market like India, another location was sought to provision supply such as Brazil or the Philippines Much of this success is due to process maturity and modularity (e.g., SEI CMMI and ITIL), sufficient global bandwidth, and clients’ improvement in vendor, project and collaboration management.  

04-07-09 “Green” Software?: Guidance for Users and Opportunity for Vendors (B. Scholze, C. Burns, 4 pages, STR-584, $$$)

Spurred by spiraling increases in energy costs and growing public sentiment about conservation of natural resources, green initiatives have gained popularity in everything from bags at supermarkets to IT. In light of recent worldwide economic conditions, green initiatives have gained even more visibility and importance to senior management in companies around the globe.

As a result, considerable attention has been focused on the potential savings which can be derived through changes to typical IT hardware infrastructures. However, Saugatuck has found that the proper approach to evaluating potential energy savings has been misunderstood by some user executives, and that the potential for software design that conserves energy has been largely overlooked by vendors.

03-31-09 A Slice of SaaS Data: Benefits are in the Eye of the Beholder (B. Guptill, 5 pages, MKT-582, $$$)

Saugatuck’s recent global survey on SaaS adoption and usage indicates that the business benefits expected from SaaS vary just a bit according to areas of business responsibility. In fact, the business benefits expected from SaaS align closely to what different executives want to use it for. There are some predictable differences and a few abnormalities, all of which need to be taken into account by executives planning SaaS, or by providers selling SaaS.

03-31-09 Cisco UCS: Bid to Change the x86 Paradigm (C. Burns, B. Guptill, 4 pages, MKT-580, $$$)

After several months of rumors (see Note 1), on 16 March 2009, Cisco formally announced their Unified Computing System (UCS). Besides denoting Cisco’s entry into the x86 server market, the UCS is also notable for consolidating server, storage, networking, and virtualization functionality into a single “box.”

03-27-09 Cloud Computing: Small and Mid-sized Hosting Providers Must Change, or Suffer (G. Kitaeff, C. Burns, 6 pages, MKT-578, $$$)

As various models and methodologies of Cloud Computing services evolve, surely there will be some impact on traditional hosting providers of all sizes.  While there will be some impact due to this disruptive technology, there are other factors at play here beyond simply a new tier of providers entering the marketplace.  The timing of Cloud Computing is now of particular interest as the economy has slowed, companies are downsizing and cutting costs, and there is now even greater scrutiny as to how IT dollars are spent.

03-24-09 SaaS in the Post-Crash Era: Industry Data Indicate IT Issues Top of Mind (M. West, 5 pages, MKT-576, $$$)

At the end of 2008, Saugatuck conducted an extensive global SaaS survey in order to gauge the impact of the economic crisis on buyers’ attitudes toward SaaS.  In the aftermath of the financial meltdown, the survey data provide clear evidence that demand for cloud-based solutions continues to remain strong. Two survey questions in particular address how organizations consider SaaS in relation to key business goals and expected business value from those SaaS solutions.

03-19-09 A Look Forward to the Key Services Trends of 2009 (B. McNee, R. McNeill, 5 pages, MKT-574, $$$)

Saugatuck’s ongoing research agenda focuses on the emerging IT trends that disrupt enterprise markets and business models. Most importantly, we focus on how information technologies and their use will change user business, and as a result, the “extended ecosystem” that support technology and business processes.  An important aspect of this, is our research and analyses regarding the most pressing challenges that CIOs and vendor management teams have in relation to the use of external service and software providers and how they expect to manage their partners in the coming year. Ongoing surveys and conversations with these decision-makers and influencers provide valuable context as to where user IT is headed, when, and why.

03-13-09 Will Government Open Source Mandates Deliver Savings, or Increase Costs? (B.Guptill, 5 page, STR-573, $$$)

We have seen a recent upsurge of news and blog posts regarding various government agencies worldwide investigating, moving toward, or (increasingly) requiring open-source-based software for their systems. Three key reasons dominate the rationale for these moves:

1. Expectation of reduced software costs;

2. Expectation of reducing or eliminating vendor dependencies; and

3. Expectation of improved standardization that will reduce future costs of software development, integration, and maintenance.

02-27-09 Hosted Solutions versus Cloud: A Model Approach (C. Burns, 5 pages, STR-569, $$$)

Far too many user executives simply assume that moving any workload to a Cloud Computing offering will automatically yield savings compared to keeping it in-house or on a traditional hosted infrastructure. The reality is that “it ain’t necessarily so,” and user executives need to better understand the costs inherent in Cloud Computing offerings – and their own workload costs – to develop an intelligent, cost-effective Cloud strategy.

02-27-09 Saugatuck Client Briefings: Key Business Challenges in 2009 (B. Guptill, M. Koenig, B. McNee, 7 pages, MKT-568, $$$)

As part of our continuous research into the business of IT, Saugatuck conducted briefings with top executives at twelve software and services vendors and three large and aggressive [user] adopters of technology – all ongoing clients of Saugatuck’s CRS subscription research service – in December 2008 and early January 2009. These represent a small, but experienced and insightful, panel of seasoned executives, providing a cross-section of user and IT vendor and service provider business perspectives.

We asked them three questions:

This Strategic Perspective provides direct quotes from many of the briefings and summarizes some of the key findings from this research program, along with Saugatuck’s insights and implications for vendors and users alike.

02-25-09 CIO Insight: Leadership for Aligning IT, Cloud and Business (B. McNee, B. Guptill, 8 pages, MKT-566, $$$)

As part of our ongoing CIO Insights research program, Saugatuck’s Bill McNee and Bruce Guptill recently caught up with Ashwin Rangan, former CIO of Walmart.com and Conexant Systems (see Note 1) – and a well recognized innovator and thought-leader vis-à-vis how IT and the business can best partner for success. Here Rangan offers a range of insightful views regarding CIO challenges and paths to success in the current, unsettled environment for CIOs and business.

02-17-09 SaaS: The Second S is for Service – Part 2 (R. McNeill, C. Burns, B. McNee, 6 pages, MKT-564, $$$)

Software developers – especially Independent Software Vendors (ISVs) with existing customers that are planning to develop and deliver Software-as-a-Service (SaaS) offerings – should carefully focus on the second “S” in the acronym. As articulated in Saugatuck Research Report “Transition to SaaS: An ISV Cookbook”, SSR-545, 29Dec08, the evolution to a SaaS business model requires a fundamental rethinking of the business value chain. At its core, ISVs that are successful transitioning to SaaS recognize that they are moving from being a product-based software business to a services-based business. Such an evolution demands significant changes in marketing and sales, distribution, financial processes, operations, IT infrastructure, organization and culture.

This Strategic Perspective is the second of two which articulates a five-step framework for developing an overarching process for establishing service as a core competency, as well as the identification of key customer requirements. In the companion Strategic Perspective, “SaaS: The Second S is for Service – Part 1”, MKT-563, 12Feb2009, we offered guidance into:

1. Classifying clients according to value

2. Defining services that need to be provided.

   In this Strategic Perspective we offer guidance into

3. Structuring the organization and identifying required resources

4. Growing services based on the organization’s goals and

5. Responding based on feedback from the client base.

02-12-09 SaaS: The Second S is for Service – Part 1 (R. McNeill, C. Burns, 5 pages, MKT-563, $$$)

Software developers – especially Independent Software Vendors (ISVs) with existing customers that are planning to develop and deliver Software-as-a-Service (SaaS) offerings – should carefully focus on the second “S” in the acronym. As articulated in Saugatuck Research Report “Transition to SaaS: An ISV Cookbook”, SSR-545, 29Dec08, the evolution to a SaaS business model requires a fundamental rethinking of the business value chain. At its core, ISVs that are successful transitioning to SaaS recognize that they are moving from being a product-based software business to a services-based business. Such an evolution demands significant changes in marketing and sales, distribution, financial processes, operations, IT infrastructure, organization and culture.

Many of these evolutionary changes are directly linked to the delivery of service(s) to customers. Such services can be grouped into the following categories:

While all of these service categories clearly affect customer satisfaction and retention, one of the most important aspects that most impacts long-term market success for any vendor is the following: Maintaining meaningful communications for identification of requirements.

This Strategic Perspective is the first of two which articulate a five-step framework for developing this overarching process for establishing service as a core competency, as well as the identification of key customer requirements. In this Strategic Perspective we offer guidance into:

1. Classifying clients according to value

2. Defining services that need to be provided.

   In this Strategic Perspective we offer guidance into

3. Structuring the organization and identifying required resources

4. Growing services based on the organization’s goals and

5. Responding based on feedback from the client base.

02-03-09 HP-IBM Rivalry: Inside Statistical Semantics for Servers and System z (C. Burns, B. Guptill, 5 pages, MKT-559, $$$)

Many of us can quickly think of various sports rivalries, such as that between the University of Michigan and Ohio State University in US college football, or between the Arsenal and Chelsea in UK football / soccer. Such rivalries help define the culture of the respective fan (i.e., customer) bases, and influence fan / customer decisions about choices ranging from colleges to newspapers to clothing color. Similarly, for years there has been a rivalry between HP and IBM over server market share and over the death (or rebirth) of IBM’s System z mainframe. Recent reports indicate both sides as “winners” in the server market share game, with repercussions regarding the mainframe marketplace. In this Strategic Perspective, Saugatuck examines what’s inside the statistics and arguments, and whether anyone should pay close attention.

01-30-09 Cisco and the Server Market: Challenging the Status Quo (C. Burns, B. Guptill, 5 pages ,MKT-558, $$$)

Recently some indications have surfaced (see Note 1) that Cisco may enter the server market with offerings that include networking management and virtualization. (Please see Saugatuck Research Alert RA-552, “Cisco’s Expected Server Splash: A Signpost or Challenge,” 22Jan2009). It is important to note that Cisco has as of this date has made no formal announcement about entering the server market. However, such an action by Cisco would clearly challenge the status quo in IT markets and infrastructures that has existed since the early 1990s.

01-30-09 CIOs Need Skills to Leverage Disruptive Technologies for Company Gain (B. McNee, S. Medina, B. Guptill, 5 pages ,CIO-557, $$$)

In this recession, CIOs have an opportunity to leverage disruptive technologies to reduce operating expenses and to help transform their companies.  They also have the opportunity to consider new approaches with respect to identifying the skills they require, and how to acquire them.  By focusing on skills to implement new solutions, and on skills to transform business and operations, they will likely find that their IT organization can be made leaner without sacrificing the quality of services and without lowering their service level objectives.  They will also find that they can have an organization that is more motivated, because they are working on innovative and transformative projects and initiatives.  By working jointly with business unit heads on acquiring the skills to transform, they are also establishing the type of partnership critical to successfully completing major undertakings.

01-26-09 C-Level Insights: Business Priorities Shift but Executives Stay in Alignment (M. Koenig, 5 pages, MKT-555, $$$)

Saugatuck clients – and many others – have been asking what impact the global economic downturn has had on the business priorities of senior executives. This Strategic Perspective looks at the results of new Saugatuck survey research conducted in late November and early December 2008 – a full two plus months after the start of the current economic crisis – focusing among other issues on the relative importance of various different business objectives to their organization’s success in the year ahead.

Saugatuck mined the results to look at which business objectives have risen in importance, and which have fallen, and compared them to research that we conducted two years ago. We also looked at whether the changes in C-Level executive priorities are consistent across groups by function and title, or if there is any misalignment of business priorities between groups.

Overall, the top business priorities of C-Level executives have become even more important – reaching new customers and sales/revenue growth, with increasing profit margins and managing budgets now in the top tier group (which is very consistent with the recent economic environment). We also see that there are some differences between executive groups in importance ratings, but that these differences do not point to a misalignment of business priorities.

To be successful in this environment, user executives must focus on their most important business objectives, even to the extent of denying or deferring promising programs that may not be core to the current business strategy. Vendors must be prepared to demonstrate the value of their offerings through case studies and have proven implementation roadmaps available for their customers. Those who show how their solutions help optimize existing IT systems and improve business processes will thrive.

01-23-09 Evaluating Cloud Impact on the Desktop “Office” Paradigm (M. West, 5 pages, MKT-553, $$$)

Although the Microsoft Office suite has become the de facto work environment for most knowledge workers, cloud-based document creation and management solutions by Google and Zoho now offer a viable alternative at a much lower price point that provides superior support for knowledge workers in a collaboration context.

Yet there are clear functional advantages on the desktop in terms of creating and managing well-made or polished documents. In this Strategic Perspective, we discuss the impact of the cloud on creating and managing office documents by contrasting desktop and cloud-based document creation, functionality, availability, sharing, timing and value.

01-16-09 India’ s Big Guns Set Their Sights On SaaS And The Cloud (B. McNee, R. McNeill, 8 pages, MKT-551, $$$)

This Strategic Perspective explores the current and mid-term Cloud and SaaS strategies of five of the leading Indian offshore giants, Cognizant, Infosys, Satyam, TCS and Wipro, based on a series of recent deep-dive briefings and research that Saugatuck has conducted.

The majority of the service providers that we were briefed by are developing Centers of Excellence to “SaaS-ify” existing corporate customer applications (when appropriate), reuse and leverage their significant process and application knowledge, and productize services for the market. In addition, many have developed significant practices deploying leading-edge SaaS solutions such as Salesforce.com, as well as providing services to ISVs transitioning from on-premise to SaaS (either through virtualized versions of their existing offerings, or new multi-tenant solutions). As our briefings continued, it became clear that the Indian service giants believe that Cloud and SaaS represents a significant opportunity – especially if they can wrap vertical expertise and intellectual property (IP), either in the form of value-added extensions to existing SaaS players, or by creating proprietary horizontal and industry-specific SaaS offerings and business services (or process utilities).

Cloud Computing will also help service providers reach the small-to-medium businesses (SMBs) – a segment that has been underserved by most of the leading Indian providers that have traditionally focused on serving the Global 2000. An early leader in this regard is TCS with its’ soup-to-nuts “IT-as-a-Service” offering, which combines 3^rd party SaaS solutions with newly built / proprietary TCS assets and IP (horizontal and vertical). If the trial continues to go well in India , anticipate a broader roll-out in 2010-2011. If marketed and supported appropriately, Cloud and SaaS-based SMB initiatives like this could bear significant fruit in the longer term – so long as providers manage the cost of delivery carefully.

01-16-09 Cloud Computing’s Next Stop – India (B. McNee, R. McNeill, 5 pages, MKT-550 $$$)

Corporate customers are demanding the articulation of a cloud computing strategy from service providers. With the Indian providers success in the outsourcing market beginning to plateau, Cloud Computing provides an excellent opportunity for them to take a leadership role to substantially reshape the IT and BPO markets.  

This Strategic Perspective provides an overview of why the Cloud will be used to build next generation IT and business process services for some of the leading “offshore” service providers. In brief, the Cloud will help them productize their intellectual property (increasingly around key vertical markets and/or customer segments); provide new services to customers, suppliers and stakeholders that are not bound by a more traditional view of the enterprise and provide a new impetus for India’s next stage of technology innovation.

12-29-08 Four Key Challenges for Social Computing in 2009 (M. Koenig, 4 pages, MKT-546, $$$)

Saugatuck expects increased interest and use of social computing solutions among consumers and businesses in the coming year. But we also believe that unlike prior years, which saw seemingly unfettered growth in all things social, there will be significant challenges to adoption and use that could stall growth and dim the star of one of the brightest segments of the software industry.

Saugatuck has identified four key challenges for Social Computing in 2009:

Taken together, these challenges depict a segment of the software industry in which the economics and underlying business model still has a way to go before it reaches maturity. Still to be determined in the greater social web is whether advertising, subscriptions or some combination of the two – or perhaps another revenue model – will pertain. And until the consumer business model stabilizes, Saugatuck believes that social computing for the enterprise will remain constrained.

12-24-08 Perspectives on Open Source: What We Saw Then, and What We See Now (B. Guptill, 5 pages, STR-544, $$$)

In our first major research report on the evolution and adoption of open source software in 2007, Saugatuck made a series of statements and issued several Strategic Planning Positions (SPPs) regarding growth, change, and the future of open source software.

One year on, we find the markets proving most of these as accurate, while a few have changed dramatically, and some new ones have emerged. The pace of evolution and adoption has accelerated beyond expectations resulting in cascading changes throughout markets, offerings, buying behaviors, and the nature of open source software itself.  

This Strategic Perspective reviews many of these original assertions and assumptions, and provides an update on where things stand today and where they are likely heading across the planning horizon.

12-19-08 Five Disruptive Technologies to Watch in 2009 (M. Koenig, M. West, B. Guptill, B. McNee, 5 pages, STR-542, $$$)

Saugatuck’s research focuses on the emerging IT trends that disrupt enterprise IT markets and business models – most importantly, how information technologies and their use will change user business, and as a result, the business of IT.

12-19-08 Five Key Issues for CIOs in 2009 (M. Koenig, M. West, B. Guptill, B. McNee, 5 pages, STR-541, $$$) 

Saugatuck’s ongoing research agenda focuses on the emerging IT trends that disrupt enterprise markets and business models – most importantly, how information technologies and their use will change user business, and as a result, the business of IT.

12-17-08 In a Disruptive Year – Another Look at IT Management (C. Burns, 5 pages, MKT-538, $$$)

Previous Saugatuck research has articulated how user IT organizations are simultaneously being driven to reduce costs and to support increasingly dynamic and agile business processes. We have explained how, due to these forces, IT organizations will increasingly adopt one or more fundamentally disruptive technologies (“IT disruptors”), such as Software-as-a-Service (SaaS), Service Oriented Architecture (SOA), Open Source software, and virtualized or “Utility Computing” infrastructures. 

12-10-08 Managing Disruptive Technologies, Part IV: IT Leadership in Action (S. Medina, B. Guptill, 7 pages, CIO-535, $$$)

This is the fourth Saugatuck CIO Perspective in a series on managing enterprise IT assets when both IT and business are disrupted by emerging technologies that do not – yet – fit into the enterprise IT portfolio.

Parts One and Two in this series examined the most recent waves of change induced by such disruptive technologies as SaaS, IT virtualization, open source, social computing, and cloud computing. We examined how IT asset management models have changed – and must continue to change – as the pace of disruption and adoption increase.

Part Three focused on the need for newer models, and the importance of asking the right questions about the disruptive technologies of today in order to better plan and prepare for the significant changes in how IT services are being delivered.

11-28-08 Infrastructure On Demand: Which SMBs Will Buy IT in the Cloud? (M. West, B. Guptill, 6 pages, MKT-533, $$$)

Infrastructure On Demand adoption varies predictably by the size of organization across a wide list of solution categories.  Organizations with 100-499 employees have been the most aggressive adopters to date, while those with under 100 employees and from 500-999 employees plan the most aggressive adoption through 2009.  By 2010, however, adoption rates across all segments, including large enterprises, become very similar, implying broad and deep acceptance and use of infrastructure on-demand services regardless of company size.

11-26-08 Asset Models for Managing Disruptive IT, Part Three: Best Practices in Three Cloudy Situations (S. Medina, B. Guptill, 11 pages, CIO-531, $$$)

Previously-published Saugatuck research in October, 2008 presented a series of introductory models for managing enterprise IT assets when  both IT and business are disrupted by emerging technologies that do not – yet – fit into the enterprise IT portfolio (see CIO-514, and CIO-521). These asset models centered on their abilities to provide business value to the enterprise.

Parts One and Two in this series examined the most recent waves of change induced by such disruptive technologies as SaaS, IT virtualization, open source, social computing, and cloud computing. We examined how IT asset management models have changed – and must continue to change – as the pace of disruption and adoption increase.

11-21-08 Clouds Like Snowflakes: No Two Alike (C. Burns, 5 pages,KI-530, $$$)

Previous Saugatuck Strategic Perspectives have framed a series of Key Issues for IT and business executives regarding cloud computing. Key Issues are forward-looking questions pertaining to technologies and markets that frame our research into user and vendor strategies, as these technologies and markets evolve.

This Strategic Perspective identifies an increasingly critical Key Issue that must be addressed as cloud computing enters the mainstream of user IT and business strategies – and as vendors/providers ramp up and roll out more cloud offerings. What degree of compatibility, interoperability, or workload portability exists between cloud offerings? Further, we offer our insight on related considerations for any adopter or vendor of cloud computing.

11-20-08 IIR European SaaS Forum 2008: Waves beyond the “C’s” (B. Guptill, 5 pages, MKT-528, $$$)

Saugatuck Managing Director Bruce Guptill presented at and participated in the 2008 European SaaS Forum in Rotterdam, Netherlands, earlier this week. Organized by the Institute for International Research (IIR), the Forum included presentations and discussion regarding SaaS evolution, usage by enterprises, and go-to-market insights and advice for providers, ISVs, SIs and VARs. Such Master Brands as IBM, Microsoft and Salesforce.com explained and reinforced their strategic investments in partner and channel SaaS growth. The presentations tended to focus on a series of SaaS business factors beginning with the letter “C” – Content, Conferencing, Collaboration, Cost, and, what Saugatuck sees as the most important factor, Customers. And SaaS was discussed constantly in a context combining enterprise IT and cloud computing – which Saugatuck sees as another indicator of the rapidly increasing acceptance of SaaS (and cloud computing) as being both strategic and mainstream for business.

11-11-08 Dreamforce ’08: Salesforce Ecosystem Expands Through the Cloud (M. West, 4 pages, MKT-525, $$$)

Last week Salesforce held its sixth annual Dreamforce Conference at the Moscone Center in San Francisco , CA , with over nine thousand customers, prospects and partners in attendance.  Salesforce made several significant technology, partnership and product announcements at Dreamforce 2008, including new capabilities for its industry-leading CRM solutions, Force.com Sites, Force.com for Amazon Web Services, and the Salesforce - Facebook partnership, expanding its ecosystem thru the cloud.

11-11-08 Defrag Conference 2008: Pulling “A-ha” Out of the Stream (M. Koenig, 5 pages, MKT-524, $$$)

Last week Saugatuck participated in Defrag 2008 in Denver , CO .  Thought leaders from vendors, users, and the analyst and blogger community convened at Defrag to explore how best “to augment the pace at which we achieve insights on raw data – to accelerate the ‘a-ha’ moment.” 

10-31-08 Cloud Computing: Current Data Gives Shape to User Intent (B. Guptill, 5 pages, MKT-522, $$$)

Saugatuck’s annual user executive survey of on-demand software and services provides data, analysis, and insight in a range of areas from SaaS to cloud computing to IT management. Our most recent data indicate a strong current deployment of on-demand core business applications, IT infrastructure services, and enterprise social computing applications. Even so, half of all user executives worldwide still have no plans in place for acquisition and deployment of on-demand IT. And, surprisingly, our data indicates that an early wave of deployment may decline rapidly over the next few years – at least until providers and users better understand how to manage cloud computing.

10-30-08 CIO Insights: Asset Models for Managing Disruptive IT, Part Two (S. Medina, B. Guptill, 10 pages, CIO-521, $$$)

Previously-published Saugatuck research presented a series of introductory models for managing enterprise IT assets when both IT and business are disrupted by emerging technologies that do not – yet – fit into the enterprise IT portfolio. These asset models centered on their abilities to provide business value to the enterprise.

This Strategic Perspective examines the most recent waves of change induced by such disruptive technologies as SaaS, IT virtualization, open source, social computing, and cloud computing. We examine how IT asset management models have changed – and must continue to change – as the pace of disruption and adoption increase.

10-22-08 Managed Service Providers: Value Evolution (C. Burns, 5 pages, MKT-518, $$$)

The current economic climate is likely to increase simultaneous demands on user IT organizations to be more responsive in supporting business processes and to reduce costs. In response to these demands, user IT organizations are:

Together, these actions are creating new challenges for user IT management organizations. These challenges are defining opportunities for Managed Service Providers (MSPs) to evolve their offerings and increase their value. In this Strategic Perspective, we provide insights into users’ changing requirements for systems management, and the resulting value evolution for MSPs.

10-22-08 SaaS-mic Shift for Channel Partners (M. Koenig, 6 pages, MKT-517, $$$)

The continuing acceptance of SaaS and cloud computing is a game-changing, seismic shift for today’s value-added resellers (VARs), systems integrators (SIs), IT consulting firms and other “channel partners.” The old business models, based on margin sharing and charging implementation and support fees, are being threatened by lower-margin subscription-based business models that require the channel partner to deliver true value-added services. Of the three types of channel partner business models identified by Saugatuck, two appear to be significantly threatened with change. Those operating under the third model, while better positioned to succeed, still face challenges.

The channel partner of the future will embrace and provide more services, either by leveraging Platform-as-a-Service offerings to extend SaaS solutions, by wrapping business services around SaaS solutions, or both. In so doing, the channel partners will begin to resemble SaaS providers and/or Managed Services Providers. This transition will not be easy, as it will mean acquiring domain expertise and migrating from a product to a service orientation.

10-17-08 Heat Map: How SaaS Business Value Varies Worldwide (B. Guptill, 4 pages, MKT-516, $$$)

While overall user executive expectations of SaaS business value show similar rankings worldwide, we see some important differences when we look at the data by region – North America, Europe, and Asia. Simplification rules worldwide SaaS expectations, but almost every other important expectation varies by region.

10-10-08 Introducing IT Asset Models for Managing Disruptive Technologies (B. Guptill, S. Medina, 7 pages, CIO-514, $$$)

Cloud computing, software-as-a-service (SaaS), IT virtualization, open source software, and enterprise social computing exemplify disruptive technologies – “disruptive IT” – that affect the fundamentals of user enterprise IT and business strategy and management. They are innovations that change how people work, how they obtain and exchange information, and how they interact with others whether for business or personal reasons. They facilitate collaboration, provide easy and fast access to information, and serve as the connective tissue enabling communities that share a common interest to work as if they were all in the same location.

Conversely, disruptive technologies bring new challenges, problems and risks. Corporations are concerned about information security, information ownership and accountability. They are also concerned about the cost of these technologies and the impact they will have on how and where work is conducted.

To manage the effects of disruptive technologies, senior IT and business executives must develop, refine and re-define models for managing IT assets. This first part of a four-part series for CIOs examines the use of IT asset models, and establishes a foundation for how disruptive IT affects existing information technology assets. 

09-30-08 Mobility: Defining the Future of Enterprise Computing (M. Koenig, C. Burns, 4 pages, MKT-509, $$$)

An explosion of next-generation mobile computing devices, combined with the rise of Software-as-a-Service (SaaS) and Cloud Computing means that mobility will be an integral characteristic of enterprise computing in the very near future. It will be through Mobile computing that end users experience the advantages of computing delivery models like SaaS and Cloud Computing.

On September 10-11, 2008, Citrix hosted an analyst event in Phoenix . Company executives presented information on corporate direction, business strategy, technology strategy, and associated products, channel and alliance efforts. The net of the analyst sessions is that Citrix is going to aggressively pursue market opportunities in three areas: desktop infrastructure, user data centers and Cloud Computing. As briefly explained in Saugatuck Research Alert RA-504, “Citrix Sets Sights on Desktops, Datacenters and the Cloud(s),” (published 17Sept08), this is an aggressive strategy for growth with substantial opportunity - but with sizeable challenges in execution.

09-24-08 Saugatuck Open Source User Interviews: Lines Blur as Perceived Cost Savings Drive Adoption (B. Guptill, R. Exler, 4 pages, STR-506, $$$)

Recent end user interviews by Saugatuck show that open source is a growing part of the IT ecosystem within enterprises of all sizes and in all industries. While not always happily embraced, and sometimes completely shunned, enterprises are steadily bringing in open source because of significant perceived benefits. Therefore, it is something vendors and end users need to deal with, not ignore.

End users are not necessarily going to vendors looking for open source; they look for the best solutions for the requirements and accept open source options in the mix. In addition, some users told Saugatuck they were surprised to find that their vendors offer or use open source.

In this Strategic Perspective, we provide insights into the emerging patterns of open source perception and adoption by enterprises and the resulting opportunities for vendors.

09-23-08 Harnessing the Cloud: A Model for the Emerging Cloud Computing Ecosystem (M. West, 8 pages, MKT-508, $$$)

Cloud Computing is an outsourcing of business and IT functionality that supports the agile economies of 21st century organizations and their increasingly mobile knowledge workers, emphasizing speed of response and enabling access to global networks of buyers and suppliers.

09-12-08 Research Reports Suggest Enterprise Social Computing Growing Pains – So What Else is New? (M. Koenig, 6 pages, MKT-503, $$$)

Recent articles in the media and research reports from industry watchers suggest that some early adopting users of Enterprise Social Computing are beginning to derive returns from their investments, while others are seeing their projects plateau (or worse, founder and go under). This comes just at the point in time where mainstream users are considering whether Enterprise Social Computing technologies (see Note 1) have a place in their organization.

Enterprise Social Computing is going through growing pains. These include comparisons with incumbent technologies, poor articulation or misalignment of goals, incomplete ROI evaluations, and cultural change requirements.

The resulting uncertainty places vendors and users of these solutions at a key inflection point with regard to the future of social computing for the enterprise – an inflection point made more critical by the current economic environment, which is causing many companies to slow down the pace of investment in new technologies.

These growing pains, however, are not new, and the strategies used by vendors and users alike to overcome them are not-so-new either. Those user and vendor firms that can manage through these pains are likely to find competitive advantages that will be difficult for their peers to match when the business cycle next turns up. 

08-29-08 Three Open Source Licensing Issues (B. Guptill, 4 pages, STR-500, $$$)

As open source software becomes “just another source” of commercial products and in-house development, licensing issues become more and more important. Most concerns about open source software licensing are expressed vaguely by vendors as well as by users; many are simply dismissed. But three core issues need to be raised and addressed by all parties.

08-29-08 Cloud Computing: Five Key Issues Framing the Research Agenda (C. Burns, M. West, B. Guptill, 4 pages, KI-499, $$$)

Saugatuck’s ongoing research into the evolution of Software-as-a-Service (SaaS) and the emergence of Cloud Computing offerings has yielded a number of insights into the challenges confronting the early adopters and vendors of Cloud Computing.

We have crystallized those challenges into a format which we call Key Issues – important questions and challenges that we see as framing vendor and user strategies and actions, changing markets, vendor offerings and the business buyer’s evaluation, acquisition and use of these offerings. (See Note 1 in the margin for Saugatuck’s Key Issue definition.) This Strategic Perspective presents five Key Issues that we see as important areas of inquiry in understanding Cloud Computing from the end user and vendor’s viewpoints through 2010. Future Saugatuck research will examine these Key Issues in depth, with analysis and recommendations for users and vendors alike.

08-21-08 Uncertain Advantages: User Interview Highlights from Saugatuck’s SMB SaaS Research (R. Exler, B. Guptill, 5 pages, MKT-497, $$$)

Executives within small and mid-size businesses (SMB) have a laser focus on what is best for their businesses. Software-as-a-Service (SaaS) as a general concept has reached a high awareness amongst SMB executives. However, these executives’ awareness of what specific benefits SaaS can deliver for the business is limited, and SaaS usage itself is generally constrained to a few basic, business functional areas.

In this Strategic Perspective, we provide insights into the emerging patterns of SaaS perception and adoption by SMBs and the resulting opportunities for vendors – based on twenty recently completed deep-dive user executive interviews, combined with key insights and findings from our worldwide web survey conducted earlier in 2008.

08-15-08 Is Everything Negotiable? Key Points to Consider When Negotiating SaaS SLAs (C. Beckham, 5 pages, BP-495, $$$)

When reviewing and negotiating SaaS service-level agreements (SLAs) with SaaS vendors, enterprise executives need to determine which issues are critical to their business requirements and expectations. SaaS vendors need to understand that their standard SLAs may not be sufficient to meet the needs of all customers (especially for large enterprise customers), and may be subject to higher levels of scrutiny - and thus negotiation - by enterprise IT executives and corporate counsel.

This Strategic Perspective identifies five critically important areas for users and vendors to focus on when negotiating SaaS SLA terms and conditions.

08-05-08 Saugatuck Insights on SaaS and On-Demand Infrastructure Adoption (C. Burns, M. West, 6 pages, MKT-491, $$$)

User IT organizations are being challenged to support increasingly dynamic business processes. The business users they support are demanding new functionality delivered very rapidly without significant budget increases. As a result of these challenges, Software-as-a-Service (SaaS) and On-Demand Infrastructure are rapidly becoming part of the mainstream in both large and smaller organizations.

Interestingly, the size of the user organization appears to have a definite influence on:

In this Strategic Perspective, we provide insights into the emerging patterns of SaaS and On-Demand Infrastructure adoption, the resulting opportunities for vendors, and some key guidance for adopters of SaaS offerings.

07-31-08 Open Source Vendor Discussions: Highlights and Insights, 2008 (B. Guptill, 5 pages, MKT-490, $$$)

Saugatuck is in the midst of its annual Open Source market research study, to be published in October 2008. As part of this research, we are interviewing 50 vendors, communities and associations providing open source software. These sessions are providing us with useful insights regarding business models, customer expectations, and competitive positioning, as well as gathering their insights on important market issues and trends.

07-30-08 Heat Maps: Regional SaaS Provider Selection Preferences (B. Guptill, 6 pages, MKT-489, $$$)

User executives select SaaS providers based on a wide range of factors, which often vary according to company size, industry, and location. Saugatuck research indicates that most user executives rely on very similar technology factors in selecting SaaS providers.

However, the importance of different business factors in provider selection varies significantly based on regional geography – which in turn can indicate the role and importance of SaaS to enterprise business in different markets.

07-22-08 CIO Leadership Imperatives for SaaS Transition and Management (S. Medina, B. Guptill, 6 pages, STR-484, $$$)

Software as a Service (SaaS) provides user firms with expanded opportunities and capabilities, often at lower costs than could be attained via on-site software offerings.  But the rapid growth in range and depth of SaaS offerings, with an attendant growth and variety in SaaS providers, brings significant IT management challenges for user-firm CIOs.  This Strategic Perspective provides insights on how to overcome those challenges via five management imperatives for SaaS.

07-11-08 Revisiting Multi-Tenancy in the Face of Competing Alternatives (M. West, 5 pages, MKT-482, $$$)

A debate has been simmering around the issue of multi-tenancy and whether on-demand solutions that do not use it are truly Software-as-a-Service (SaaS) or, instead, a reversion to the ASP hosting model. 

06-30-08 Keep the Big Picture in Mind: Best Practices in SaaS SLA Management (C. Beckham, 5 pages, BP-479, $$$)

SLAs are important tools for SaaS vendors as well as their enterprise users.  As SaaS solutions expand from department-wide to broader enterprise-wide usage – and as SaaS solutions are increasingly used for mission-critical business functions – SaaS SLA terms and conditions become increasingly important.

As enterprise users gain more experience with SaaS solutions, SLAs should be reviewed and possibly be revised to ensure that all needs and expectations are met – for users as well as for SaaS vendors.

06-30-08 Ready or Not? Surprising User Data on Enterprise Business Applications (B. Guptill, 5 pages, MKT-478, $$$)

Saugatuck’s latest user research regarding plans for enterprise SaaS applications deployment yields some intriguing insights into the realities of “enterprise-ready SaaS.” While there are clear top- and bottom-ranked categories when it comes to what users have in place and plan to deploy, a vast middle ground suggests either ambivalence, or a broad-based, hybridized (SaaS plus on-premise) future for enterprise IT.

06-27-08 Operational Issues in SaaS Transition: More than Meets the Eye (C. Burns, M. West, 5 pages, STR-477, $$$)

Software vendors must overcome multiple challenges when preparing to enter the Software-as-a-Service (SaaS) arena. Most of the challenges can be grouped into the following five categories:

06-26-08 Research Agenda: Key Issues for Open Source Vendors and Users (B. Guptill, A. Perrin, 4 pages, MKT-476, $$$)

Open source is at a key inflection point between user expectations and vendor capabilities. User IT and business executives are looking to trusted vendors for guidance while open source is appearing, often unbidden and unplanned, all around them. Meanwhile, vendors – even the most established open source providers – are struggling with unprecedented demand from unexpected quarters and uneducated buyers.

05-30-2008 Clearing the Air on Cloud Computing: Insights from Ten CIOs (B. McNee, B. Guptill, C. Burns, M. West, 6 pages, MKT-469, $$$)

The concept of Cloud Computing is both widespread and vaguely defined. It’s becoming more generally accepted that the evolution of SaaS will lead users into Cloud Computing in a variety of ways. But while definitions of Cloud Computing abound, consensus about what it is and will become is still elusive.

05-30-20 Heat Maps: On-Demand Infrastructure Usage Indicates Strong Cloud Computing Use and Rapid Growth (B. Guptill, 5 pages, MKT-468, $$$)

Data from Saugatuck’s latest SaaS user survey indicates a surprisingly powerful current presence, and solid growth, in almost all types of on-demand infrastructure services.  Saugatuck has mapped the services according to a “heat index” that enables quick perception and comprehension of relative growth over time.

05-28-08 SaaS User Best Practices: Toward the Development of More Formal, Sophisticated Management Policies (C. Beckham, 5 pages, BP-467, $$$)

Saugatuck’s latest SaaS research, which includes interviews with more than two dozen SaaS user executives, indicates that even the most experienced SaaS user firms have not established formal SaaS governance or similar management programs. 

05-09-08 SaaS and User Satisfaction: Enterprise-Ready, or Not? (M. West, 5 pages, MKT-463, $$$)

While SaaS users show high degrees of satisfaction with SaaS solutions overall, satisfaction varies when it comes to specific attributes of the SaaS experience. Users report higher satisfaction with Wave I attributes (or standalone solutions), and lesser satisfaction with more sophisticated Wave II and III attributes. This has important implications for SaaS providers when it comes to being “enterprise ready.” 

04-30-08 The Business Appliance: Flexible Functionality for a Broad Range of Computing Needs (C. Burns, M. Koenig, 6 pages, MKT-461, $$$)

Regardless of company size, most IT organizations are tasked with multiple common objectives.  Ongoing Saugatuck research has shown that chief among these objectives are: improve service levels, maintain security, reduce costs, and deliver new or enhanced functionality to support their end users’ dynamic business processes. As the IT organizations strive to meet these objectives, they are embracing solutions ranging from packaged applications which run on their internal infrastructure, to Software-as-a-Service (SaaS) offerings which run on a provider’s infrastructure.

Any new solution poses two common challenges for any IT organization:

Recently, appliance computing (see Note 1) has been gaining popularity and credibility as a means of addressing both challenges. As users are finding, the IT appliance is flexible and can deliver a broad range of business functionality (see Strategic Perspective IT Appliances: Too Good to Ignore?, MKT-442, 12Mar08).

04-29-08 Saugatuck SaaS Research: Waves and Platforms in the Cloud (M. West, B. Guptill, 5 pages, STR-458, $$$)

With SaaS now part of mainstream IT and business, users are beginning to see beyond the baseline abilities of the first wave of SaaS. Many are ready to leapfrog beyond the emerging and consolidating second wave (with its focus around integration), to SaaS’ third wave of workflow-enabled business transformation.  Beyond the third wave is cloud computing, built on on-demand infrastructure that ushers in the fourth-wave – a post-SaaS transition to measured, monitored and managed business processes.

04-22-08 MySQL Conference 2008: A Sense of Arrival and Accomplishment for Open Source Software (B. Guptill, 5 pages, STR-455, $$$)

Saugatuck Managing Director Bruce Guptill participated in MySQL’s annual conference in Santa Clara, CA last week.  In speaking with user and vendor conference attendees, he came away with a strong sense that the open source software movement has accomplished the position of being “just another source” for critical software.  It’s a key, strategic milestone for MySQL in particular and for open source software in general. Open source software has, to an extent deemed improbable only a few years ago, “arrived” as a source of competitive advantage for both users and vendors.

04-11-08 SaaS & Outsourcing: Solutions For IT Processes, Too (C. Burns, 6 pages, MKT-453, $$$)

User IT organizations are being tasked to provide support for increasingly dynamic business processes. These new functions are expected to be delivered very rapidly and without significant budget increases. Ongoing Saugatuck research shows that Software-as-a-Service (SaaS) offerings are increasingly being selected to achieve these objectives. Monitoring and managing services delivered by SaaS is challenging IT organizations to evolve from managing IT infrastructure assets, to managing services which support their users’ business processes.

At the same time, user IT organizations are also being asked to reduce the costs for existing infrastructures. To accomplish this, IT organizations have turned to Open Source software, Service Oriented Architecture (SOA), and outsourcing some IT functions such as Help Desk. Recently, various forms of IT virtualization have been delivering substantial cost reductions. (See Saugatuck Report, “The Many Faces of Virtualization: Understanding a New IT Reality”, SSR-420, 28Dec07.)

More recently, user IT management organizations are recognizing that SaaS offerings and service providers can impact the costs of processes within IT such as security or systems management. Possibly more importantly, the adoption of SaaS and services offerings for IT processes is enabling IT organizations to meet the challenge of focusing on their users’ business processes.

03-31-08 Is Open Source Already Routine? Or Misunderstood by Vendors? (B. Guptill, 5 pages, STR-450, $$$)

Saugatuck’s current research among enterprise software providers indicates that many, if not most, see open source software as “just another piece of business.”

This is a shocking change from 2007, when Saugatuck interviews and briefings with software vendors worldwide indicated that most were struggling to understand the demand for open source software, the role of open source within their portfolios, and the most effective business models for profiting from open source.

Within the past 12 to 18 months, many software vendors have moved from fear to aggression, pursuing open source development firm acquisitions, incorporating open source code into offerings throughout their portfolios, and looking for (or planning) open source  offerings. Saugatuck sees two likely negative results of this:

1. To move too quickly from uncertainty to embrace bodes ill for many if not most vendors and their customers. A too-aggressive adoption and deployment of any technology leads to a lack of coordination across products and partners, incomplete offerings, and a lack of adequate support, all of which lead to unhappy customers and partners. 

2. At the same time, a surprising number of software vendors report to Saugatuck that they feel they have “this open source thing under control,” as a VP of technology and business strategy for one of the world’s largest software firms put it recently. Several already report open source as “just another code source” that is being integrated into their development operations. But when pressed for details regarding strategies and management resources dedicated to coordination and management of open source development and licensing, few have been able to report any.

03-31-08 Enterprise-grade Web2.0: An Uphill Climb (M. Koenig, C. Beckham, 6 pages, MKT-449, $$$)

Enterprise-grade Web 2.0 – i.e., web-services-based collaborative and social computing for the enterprise – is getting a tremendous amount of visibility in the trade (and even the mainstream) press.  Vendors large and small – new and established – are beginning to invest in Web 2.0 solutions targeted for the enterprise.  Many of these investments are around establishing a platform for users and solution providers to build new applications using some or all of the components of Web 2.0.

Saugatuck research indicates that bringing social computing into the enterprise through the “front door” – i.e., formally, via IT departments – may be more difficult than anticipated.  Many companies already have corporate policies banning one or more of the solutions that comprise this category, for either productivity or security reasons.  Other companies do not have IT management polices and organizations that will be flexible enough to deploy and optimize these solutions.

It will not be enough for vendors to just create a “enterprise-ready” platform upon which companies can build on-demand social computing applications.  They will also have to provide those companies with help in building the business case for, and managing the new IT environment created by, Enterprise-Grade Web 2.0.

03-18-08 Notes from the Road: SaaS Market Readiness & Growth in Asia-Pacific (B. Guptill, 8 pages, MKT-444, $$$)

Saugatuck Managing Director Bruce Guptill recently spent two weeks traveling in India , Malaysia, China and Australia. In addition to participating in a number of briefings, Saugatuck had a chance to dialog with 26 independent software vendors, value-added resellers, and managed services providers in a variety of one-on-one interactions and meetings.  His discussions indicate that while traditional software and services providers face many similar issues worldwide when transitioning to software-as-a-service (SaaS), regional concerns highlight key differences between the Asia-Pacific region, Europe, and the U.S., and indicate that the development, deployment, and adoption of SaaS in the region is likely to lag the U.S. and Europe by as much as two-to-three years.

03-12-08 IT Appliances: Too Good to Ignore? (M. Koenig, C. Burns, B. Guptill,  6 pages, MKT-442, $$$)

Vendors of IT appliances claim their offerings can provide substantial relief to several of the challenges confronting typical user IT organizations. Their claims sound much like those of many SaaS providers, in that appliances can:

At the same time, hardware vendors are eyeing the same IT infrastructure challenges and evaluating ways that packaged application or middleware functionality could provide competitive differentiation.

This Strategic Perspective examines the forces that are driving the increase in popularity of both real and virtual appliances on the part of both users and vendors. In a follow-up Perspective, we will look at how appliance computing is evolving, and describe the different types of appliances that we envision taking root in the market. 

02-29-08 x86 Virtualization: Treating Symptoms While Awaiting a Cure – Part 2 (C. Burns, 5 pages, STR-440, $$$)

x86 server virtualization treats some important symptoms of the illness of IT infrastructure sprawl, but does not cure the illness itself – or the underlying cause. This Strategic Perspective is the second of a two-part series on the effects – and effectiveness – of x86 server virtualization on this common and growing affliction.

The first part, "x86 Virtualization: Treating Symptoms While Awaiting a Cure – Part 1", STR-439, 29Feb08, articulates the challenges (i.e., the symptoms) confronting typical x86 infrastructures. In this Perspective, we dig into the underlying illness of x86 infrastructures and articulate how current x86 virtualization tactics and strategies both hit and miss curing that illness.

02-29-08 x86 Virtualization: Treating Symptoms While Awaiting a Cure – Part 1 (C. Burns, 5 pages, STR-439, $$$)

Despite broad press and analyst coverage focused on IT virtualization, there is one facet that has not been probed deeply enough. While virtualization’s benefits are real and are typically substantial, they do not directly address the fundamental problems which underlie x86 server infrastructures.

In this Strategic Perspective, the first of a two-part series, we articulate the challenges confronting typical x86 infrastructures and how virtualization addresses many of them. The second Strategic Perspective, "x86 Virtualization: Treating Symptoms While Awaiting a Cure – Part 2", STR-440, 29Feb08, uncovers the underlying illness of x86 infrastructures and articulates how virtualization both hits and misses resolving that issue.

02-21-08 Consideration (and Selling) of Open Source Software Varies by Industry (B. Guptill, 4 pages, MKT-437, $$$)

A key step toward widespread adoption of open source software is its consideration and evaluation by firms planning to acquire new servers, systems, applications, databases or software tools. Ongoing review of Saugatuck user data regarding open source adoption indicate significant differences between industry segments when it comes to consideration and evaluation of open source software for these critical areas of IT and business. Retail leads user adoption, while Life Sciences lags.

02-06-08 A Chat with Revevol’s Louis Naugès and Laurent Gasser on European SaaS Market Adoption (B. McNee, 6-pages, INT-433, $$$)

One of the great pleasures of my recent business trip to Europe was meeting with two senior consultants in Paris one evening over dinner – Louis Naugès and Laurent Gasser – with whom I had a far-ranging and interesting conversation focused on key trends in SaaS, both in France and across Europe .

01-31-08 SaaS Platforms Evolve to Embrace Cloud-Based Development (M. West, 5-pages, MKT-432, $$$)

Cloud-based development is suddenly a viable alternative to on-premise development targeting traditional computing platforms.  Salesforce is one of the most visible platforms enabling cloud-based development, along with NetSuite. And the trend is growing to include a wide array of platform players including, for example, Bungee Labs, Coghead, Comrange, DreamFactory, Facebook, Iceberg on Demand, and IT Factory.

SaaS platform capabilities have evolved through three stages:

1) Integration - ecosystem partner integration via APIs and integration of SaaS solutions with on-premise applications, 
2) Customization - customization of SaaS solution UI and logic via APIs and scripting toolkits,
3) Development - cloud-based development of enterprise applications and SaaS solutions.

The next stage of SaaS platform evolution will extend those same three capabilities – integration, customization and development – to enable and enrich SaaS workflow.

01-29-08 Virtualization Saugatuck Planning Positions – Part 2 (C. Burns, B. Guptill, 6 pages, SPP-429, $$$)

Virtualization of several key aspects of IT – servers, mainframes, storage, networking, and more – is rampant and growing because it delivers significant cost improvements over most existing IT implementations. But virtualization blurs boundaries between technologies and responsibilities, and extends well beyond what most IT and business executives consider as they plan and invest in it.

Saugatuck’s latest Strategic Research Report ("The Many Faces of Virtualization: Understanding a New IT Reality," SSR-420, 28Dec07) presents insight and guidance for users and vendors regarding the many forms of IT virtualization. The Strategic Research Report includes a series of Saugatuck Strategic Planning Positions (SPPs) that help users and vendors plan for changes in virtualization use and management.

01-24-08 Understanding Master Brands: A Saugatuck Framework for IT Ecosystem Positioning and Power (B. Guptill, 8 pages, STR-428, $$$)

Practically every market for hardware, software, and services has the following hierarchy:

Understanding how these hierarchies work, and especially the relationships within them, is key to developing and refining IT vendor market strategy, from competitive offerings to alliances and channels.

Developed and refined over the past five years, Saugatuck’s "Master Brand" IT Vendor Ecosystem Scenario has been used by leading IT systems and software vendors worldwide in the development of strategies for markets, offerings and partners/channels. In this Perspective, Saugatuck presents and discusses its IT Vendor Ecosystem Scenario. This includes defining and explaining the term Master Brand, positioning how different technologies and markets can have one or more Master Brands, and how positioning as a Master Brand influences relationships between user and vendor management.

01-18-08 Virtualization Saugatuck Planning Positions – Part 1 (C. Burns, B. Guptill, 4  pages , SPP-426, $$$)

Saugatuck’s latest Strategic Research Report ("The Many Faces of Virtualization: Understanding a New IT Reality," SSR-420, 28Dec07) presents insight and guidance for users and vendor regarding the many forms of IT virtualization. The Strategic Research Report includes a series of Saugatuck Planning Positions (SPPs) that help clients plan for changes in virtualization use and management.

12-31-07 Web 2.0 in 2008: First the Blueprint, then the Foundation (M. Koenig, 6 pages, MKT-421, $$$)

While Web 2.0 has garnered a lot of attention in the media, and investment by solution providers, in 2007, there is still work to be done before it can be considered enterprise-grade.  Chief among the inhibitors to adoption is that the "blueprint" required by enterprise IT executives – the implementation roadmap and business case – are not yet complete.  Further, when they are complete, they will look very different from those used to justify and manage earlier generations of information technology.

Saugatuck believes that – following the pattern established by the adoption of SaaS in the enterprise – Web 2.0 will likely make a name for itself by facilitating interactions between customers and employees in the CRM and HR arenas.  Just as solutions in those areas proved the worth of SaaS, we believe that Web 2.0 will first prove its business worth in those areas as well.

Because leveraging Web 2.0 by definition necessitates a wholesale change in the way companies collaborate, communicate and negotiate, IT managers must take a different approach to introducing it into the enterprise, which includes creating Web 2.0 playgrounds and preparing to manage the metadata explosion.  This new approach is essential to Web 2.0 success, and represents opportunities for vendors in the Web 2.0 ecosystem to establish themselves as credible solution providers.  Similarly, vendors who can help their customers to build the new business case for enterprise-grade Web 2.0 will also be better positioned for long run success.

12-27-07 IT Disruptors Bring Management Challenges and Opportunities (C. Burns, 8 pages, STR-418, $$$)

User IT organizations are simultaneously being driven to reduce costs and to support increasingly dynamic and agile business processes. As a result, IT organizations are increasingly adopting one or more fundamental changes such as Software-as-a-Service (SaaS), Service Oriented Architecture (SOA), Open Source software, and a virtualized or Utility Computing infrastructure.

Earlier this year Saugatuck identified these "technology disruptors" as presenting both capabilities and problems beyond the scope of what most user enterprise IT management organizations, systems, practices and skill sets can adequately address (see IT Management Evolution: All Roads Lead to Rome, STR-372, 31Jul07, and IT Management: Disruptive Influences Driving Four Stages of Evolution, RA-390, 26Sep07).

12-18-07 Open Source in 2008: Over the Threshold and Into Growth Mode (B. Guptill, 5 pages, MKT-416, $$$)

Saugatuck expects 2008 to be a "threshold" year, opening up vastly larger opportunities and activity in open source adoption and deployment by both vendors and users. This includes the rapid growth in adoption by user enterprises, beginning of widespread standardization within user environments, growth of governance, and software vendors begin understanding how best to profit from open source.

12-18-07 On the Outskirts of Wave III: SaaS Platforms Proliferate in 2008 (M. West, 5 pages, MKT-415, $$$)

Through Waves I and II, as SaaS solutions spread across the full spectrum of business, technology and consumer needs, the Platforms these providers develop, or license and extend, have become ever more varied to address those needs, including integration, customization, data pipes for BI or for data sharing, data storage, content management, workflow, and development tools or APIs.  On the verge of Wave III in 2008, we share insights gathered through deep-dive interviews with leading SaaS providers and Ecosystem partners concerning SaaS Platforms, Marketplaces and Ecosystems.

12-14-07 Open Source Adoption Path II: Mapping Open-source Business Software Growth Through 2010 (B. Guptill, 6 pages, MKT-414, $$$)

Last month, we looked at user adoption plans and data to frame a typical roadmap of enterprise-level open source adoption.  This month, we look in more depth at specific user business software categories, to see which will lead and which will follow on the path to open source.

To paraphrase previously-published Saugatuck open source software research, open source is already everywhere within user enterprises. Our latest research indicates that open source code is already embedded in between one-third and one-half of existing user software.

But beyond its incorporation as lines of code in various applications and operating systems, open source also accounts for much of the growth in core user software categories.  Saugatuck research and analysis indicates that open source software’s presence will increase from approximately 10 percent of key user on-premise software in 2007, to between 15 percent and 20 percent by 2010. That includes the following key enterprise software categories:

11-30-07 As the CFO Evolves (Again), Vendor Opportunities Await (Again) (M. Koenig. C. Burns, M. West, 6 pages, STR-411, $$$)

Saugatuck Research into Business Intelligence and Corporate Performance Management suggests that the role of the CFO in the Enterprise is evolving yet again.  In the past two decades, we have observed the CFO’s role grow layer by layer

With each of these shifts, the information technology capabilities have also evolved, and new investment in IT has followed.  This Strategic Perspective summarizes the changes over the last two decades, and describes the shifts in business computing that accompany them – the most recent of which Saugatuck is calling Unified Performance Management. 

11-28-07 Open Source Adoption Path I: From Fringe to Core IT in Five Years? (B. Guptill, 7 pages, MKT-410, $$$)

Saugatuck’s 2007 research study on user enterprise adoption of open source software indicates increasingly predictable user paths to enterprise-wide open source presence. A typical pattern of open source adoption and deployment moves from implementing enhancements to existing legacy systems to using open source as foundations for core IT in as little as three to five years.   More than a third of user executives worldwide – including IT executives – expect to deploy open source software to account for at least 25 percent of core, enterprise and data center IT foundations within three years.  This is a strong indication of open source software’s ability to change user enterprise software acquisition strategies – and to disrupt enterprise software vendor business.

11-27-07 Managing On-Premise Products in the SaaS Transition: Kadient (M. West, M. Koenig, 5 pages, MKT-408, $$$)

As part of its ongoing series looking at the transition from traditional ISV to SaaS solution provider, Saugatuck delved further into the experiences of Kadient, which has recently completed its transition from ISV to SaaS provider, while not abandoning its premise-based product offerings. Nevertheless, this SaaS transition required changing the company’s operating model, platform, sales model, internal culture and its organization.

In this Strategic Perspective, Saugatuck considers how Kadient addressed the five key challenges that every company must consider when transitioning to SaaS (e.g., economic, technological, operational, organizational and cultural). As ISVs make plans for this journey, each must prepare to meet these five challenges to assure that the transition from ISV to SaaS provider will be successful. 

11-21-07 US Will Lead Europe in Core Software Open Source Presence through 2012 (B. Guptill, 6 pages, MKT-406, $$$)

Despite business and IT industry press coverage of Europe as a region leading in open source adoption and use, data from Saugatuck’s recent user executive survey of open source software use and presence indicates that US firms are much more likely to adopt and utilize open source alternatives for core enterprise software categories over the next three to five years.

10-30-07 Open Source Software Governance: Smaller Firms at Risk (B. Guptill, 5 pages, MKT-401, $$$)

Continued analysis of Saugatuck's ongoing open source user survey data indicates that smaller firms are placing the greatest business importance on open source software – but larger firms are more likely to govern it more effectively. This could place smaller firms at risk of losing the competitive advantages of open source software.

10-29-07 IT Management: Necessary Evil to Business Process Necessity (C. Burns, 6 pages, STR-400, $$$)

Historically, IT management was viewed as an arcane art somewhere between esoteric science and mysticism. This resulted from the state-of-the-art of data processing technology which demanded a pathologic focus on the components and infrastructures. IT staff worked on exorbitantly expensive equipment in special glass-walled rooms and spoke in strange terms such as "kilobytes" and "CPU seconds".

Much of the mystery is now gone from IT. And, many IT management organizations have evolved to focus on partnering with their business unit "customers". But, while business managers today appreciate the impact that IT management can have on their individual objectives, IT management is typically still perceived as a "necessary evil".

As previously articulated (see IT Management Evolution: All Roads Lead to Rome, STR-372, 31July07) continuing and expanding adoption of a series of disruptive influences in IT and business – Software-as-a-Service (SaaS), Service Oriented Architecture (SOA), Open Source software, and a virtualized or Utility Computing infrastructure – are necessitating evolution in IT management. The impact of these disruptive influences is magnified by the increasing dependence of business processes on IT.

The challenge for IT managers is to bring their processes and staffs into the spotlight and be recognized as a valuable business necessity by becoming a key player on the business service management stage. The alternative is to be caught in the headlights and become road-kill along the business process management highway.

10-19-07 It's a Small (Business) World: Smaller Enterprises Lead Open Source Expectations (B. Guptill, 5 pages, MKT-397, $$$)

Summary Analysis of Saugatuck survey and interview research for our recently-released open source software adoption and business study indicates that smaller enterprises – especially those with less than $100M in annual revenues – are most likely to see Open source as core business software, as a reason for buying specific solutions, and as a differentiator between vendors. 

10-05-07 DreamForce '07 – Inflating the SaaS Balloon (B. Guptill, M. West, 6 pages, MKT-393, $$$)

Saugatuck Technology attended DreamForce 2007, Salesforce.com's annual user, partner, media and analyst event. Our participation included general sessions, media/analyst sessions, one-on-ones with partners and users, and informal discussions with attendees of all types.

Key announcements included Force.com (platform-as-a-service) and VisualForce (user interface-as-a-service), as well as Salesforce Content and Salesforce Ideas (both part of the Winter ’08 release of its’ core CRM solution). While these initiatives continue to position Salesforce as a market leader and industry innovator, Salesforce will need to be careful not to overemphasize "the next big thing" in favor of delivering the goods on previous promises made. 

09-28-07 DreamForce '07: Customer Interviews Indicate the Strength of Salesforce and SaaS (B. Guptill, 6 pages, EVT-391, $$$)

More than 7,000 users attended Salesforce's annual DreamForce '07 user and partner conference at the Moscone Center in San Francisco, September 17 - 19, 2007.  Attendance was up more than 25 percent from 2006's 5000 attendees. Salesforce made several interesting announcements, most notably regarding its Force.com "on demand" SaaS development platform service – which the company has labeled "platform-as-a-service."  It also laid out initiatives for expanding Salesforce and AppExchange presence within customer enterprises, including the "Ideas" platform/application for intra-enterprise collaboration and communication.

As we did in 2006, Saugatuck attended DreamForce, participating in several analyst and VIP events, and meeting with SFDC executives, partners, and other analysts. And as we also did in 2006, Saugatuck interviewed Salesforce customers regarding SaaS (and Salesforce) benefits, Salesforce functionality, future adoption plans for SaaS, and attitudes toward multi-tenancy and data privacy issues. 

09-24-07 Real or Virtual: All Infrastructures Must be Managed (C. Burns, 5 pages, STR-389, $$$)

IT virtualization is not only a hot topic, it is an important step in what Saugatuck sees as the increasing "Hybridization" of the typical IT environment. "Hybrid" IT environments combine in-house and outsourced technologies, systems, and services to enable more flexible business environments – and, just as importantly, enable the reduction of IT management costs. Virtualization is also a cornerstone of the still-nascent "IT utility" as described in previous Saugatuck research (see IT Insights and Trends: On the Road to Utility Computing - How Far is Far Enough?, STR-321, 22Feb07).

09-21-07 Five Challenges in Navigating from Traditional ISV to SaaS Provider: Strategic Learning from Concur Technologies (M. Koenig, M. West, 5 pages, STR-388, $$$)

As part of Saugatuck’s ongoing software-as-a-service research agenda, we recently delved into the experiences of Concur Technologies which is one of the first ISVs to successfully make the transition from traditional ISV to SaaS provider – and is now reaping the rewards of their transition to SaaS in the both the marketplace and in financial markets.

As this Strategic Perspective illustrates, earning these rewards required changing the entire company’s operating model. In studying Concur’s experience, Saugatuck identified five challenges that it had to address successfully -- challenges that every company must consider:

As more ISVs embark on this important and strategic journey, each must recognize that unless it is prepared to meet the five challenges note above, the transition to SaaS will be unsuccessful, and the investment will not yield the promised reward.

09-13-07 Open Source as Differentiator: User Expectations vs. Vendor Reality (B. Guptill, 5 pages, MKT-386, $$$)

Today, between 10 percent and 15 percent of user enterprise executives see the inclusion of open source as an important differentiator between vendors and software offerings, or as a key reason to buy a specific solution or work with a specific vendor. By YE 2010, an average of 40 percent of user enterprise executives expect open source to be a differentiator or key reason for buying; and those numbers increase to an average of 70% by YE 2012.

08-31-07 SaaS Marketplaces: Terminology, Taxonomy and Market Growth (M. West, B. McNee, 6 pages, MKT-383, $$$)

SaaS ecosystems, SaaS marketplaces and SaaS integration platforms are often used terms, but equally often misunderstood. We define these terms and present our taxonomy of five distinct types SaaS marketplaces:

We discuss the evolution of SaaS ecosystems, SaaS marketplaces and SaaS integration platforms through the three waves of SaaS evolution, and we project the size of SaaS marketplace revenue opportunity through 2011.

08-30-07 Reader Q&A: SCO-Unix-Linux Impacts on Microsoft, HP, Sun and Novell (B. Guptill, 4 pages, QA-382, $$$)

Last week, Saugatuck published a Strategic Perspective looking at the likely effects of the recent SCO-Novell judge’s decision (see Saugatuck Strategic Perspective MKT-379, "Debacle, Decision, and Driver: SCO-Novell-Unix-Linux Open Source Market Impacts," 22Aug07). Since its publication, we have received some interesting questions regarding the situation, the players, and possible changes and outcomes. We respond to these questions in this Q&A Perspective.

08-29-07 Key Lessons Learned, Part 2: Financial Considerations in Navigating from Traditional ISV to SaaS Provider (M. Koenig, B. McNee,  4 pages, MKT-381, $$$)

Of the thousands of established traditional license ISVs worldwide, Saugatuck estimates that fewer than fifteen percent are actively transitioning or already transitioned to a SaaS-based business model, with another forty percent or more in a variety of planning stages.

As we have previously written, this transition requires a fundamental rethinking of the entire business, but in the end, reaping the financial rewards is dependent on understanding and planning for specific financial considerations. Our experience with ISVs who have completed the journey is that there are three key financial considerations that must be planned for and managed in order to successfully make the transition:

Proper planning and management will reduce the risks inherent in making such a massive change to the ISV. 

08-24-07 Debacle, Decision, and Driver: SCO-Novell-Unix-Linux Open Source Market Impacts (B. Guptill, 5 pages, MKT-379, $$$)

On August 10, 2007, U.S. federal Judge Dale Kimball issued a summary judgment in the case of SCO v. Novell, stating that "Novell is the owner of the UNIX and UNIXWare copyrights." Among other findings, SCO was found to be in breach of its licensing agreement with Novell and required to pay nearly $25 million in royalty payments to Novell. The ruling cast further doubt on SCO's claims that IBM and Linux infringe on any SCO-copyrighted source code.

Since 2002, Saugatuck research regarding open source adoption has found repeated and frequent mentions of this landmark – and messy – case as an important inhibitor to the adoption and use of open source software. The conventional, common wisdom was that the SCO case represented not only an inhibitor by itself, but also represented a powerful market uncertainty regarding open source.

07-31-07 IT Management Evolution: All Roads Lead to Rome (C. Burns, 4 pages, STR-372, $$$)

Saugatuck research clearly points to continued and expanded adoption of Software-as-a-Service (SaaS), Service Oriented Architecture (SOA), Open Source software, and Utility Computing infrastructure. Individually, each of these technology disruptors denotes evolutionary changes in existing IT infrastructures.

However, for most user enterprises, these four are both coincident and interrelated. The net result is that adoption of any of these four "technology disruptors" (SOA, SaaS, Open Source, and Utility Computing) will likely result in adoption of the others. But it is rare that each is coordinated to be managed effectively as part of a holistic IT and business strategy or plan. The cascading effects of adopting one disruptive influence have to be planned for in the context of multiple, simultaneous disruptive influences.

07-31-07 SOA’s Dependence on Open Source is Key to Vendor Success (A. Perrin, 4 pages, MKT-371, $$$)

Saugatuck research with user and vendor executives indicates that the adoption and use of open source software is an increasingly important driver of SOA adoption and usage. A variety of factors makes open source a complementary, enabling technology for SOA. Chief among these are community development, componentization, and affordability. Saugatuck believes that as these forces drive open source software more deeply into the mainstream, that SOA adoption will accelerate in parallel.

07-27-07 Open Source Vendor Perspectives: It’s Real, It’s Hidden, and It’s Bigger Than You Think (B. Guptill, 5 pages, STR-370, $$$)

Saugatuck’s open source research program has been probing vendors of open source offerings for insights and perceptions regarding open source market influence, user presence, and long-term direction. The results will be incorporated into our Fall 2007 open source software Research Report, scheduled for publication in mid-September. That report will also include data and analyses from the worldwide IT user executive web survey that we are conducting on open source presence, influence, attitudes and impacts. 

07-20-07 SaaS: What You Don’t Know Can Hurt You (C. Burns, 4 pages, STR-367, $$$)

The Software-as-a-Service (SaaS) arena is experiencing growth in two dimensions: rapid expansion of offerings, and growing adoption by users. A recent public filing by a major SaaS provider has highlighted that customers may not be aware of key attributes of the IT infrastructure which underlies the SaaS application. Just as learning that your brake pads are badly worn while driving down from Pikes Peak can ruin your day – learning that your SaaS provider has weak or non-existent recovery capabilities during recovery from a disaster can ruin your career.

06-29-07 Open Source’s Changing Nature Sparks Debate: What, and Where, is "Open Source?" (C. Burns, B. Guptill, 4 pages,  MKT-363, $$$)

Current Saugatuck research indicates a rapidly increasing presence of open source-based software within user enterprises. More and more, open source can be found "behind the scenes," embedded within various solutions and SaaS offerings. The role and influence of open source within user and vendor organizations are changing. Open source usage and the intertwining of SaaS, SOA, and utility computing are blurring the once-clear delineation between open source and proprietary software.

06-29-07 Framing Security-as-a-Service Issues: FUD in the SaaS Cloud (M. West, 6 pages,  MKT-362, $$$)

Software-as-a-Service (SaaS) Security solutions have begun to separate themselves in the marketplace from the Managed Security Services Providers (MSSPs) who manage customer premise equipment, due to advantages of the SaaS delivery model plus the superior cloud-based approach to mitigation. Yet this is still an emerging class of service provider not yet fully trusted by many IT organizations. Security and privacy still remain as significant inhibitors to SaaS adoption, even in non-mission-critical application categories. However, due to the superior advantages of cloud-based SaaS Security solutions, we believe that SaaS Security will overcome marketplace fear, uncertainty, and doubt (FUD) and, by 2010, Data Security will have shifted from an inhibitor of SaaS adoption to a key driver. This Strategic Perspective examines the emerging Security-as-a-service marketplace, and frames a number of key issues surrounding cloud-based Security solutions – and likely outcomes.

06-22-07 The SaaS Opportunity: Focus Solutions on Complementary (Rather than Radically New) Business and IT Practices (B. Guptill, 4 pages, STR-359, $$$)

Feeling a combination of competitive pressure and the necessity of growth, ISVs continue to look to Software-as-a-Service (SaaS) for opportunities, markets and revenues. Most will initially focus on shifting existing on-premise software offerings to a SaaS delivery model. At the same time, many will look to SaaS to open up brand new markets and reach new users. In both cases, vendors will likely overlook the strategy and opportunity most likely to succeed: SaaS as a complement to the ISV’s business, and to the ISV customers’ business.

06-15-07 Key Lessons Learned: Navigating from Traditional ISV to SaaS Provider (M. Koenig, A. Perrin, 8 pages, STR-357, $$$)

Now that Software-as-a-Service (SaaS) is considered by many IT buyers as "enterprise grade," hundreds of established ISVs are faced with strategic decisions that could determine the future of their company: Should we develop a SaaS-based solution? If so, when? And what are the key "lessons learned" that we can take from others who have already made the transition? 

05-29-07 Total Cost of Usage: Usage-Driven IT Cost Structures Require Usage-driven Metrics (B. Guptill, C. Burns, 4 pages, STR-351, $$$)

Enterprise IT is entering a period of broadening adoption of such non-traditional infrastructure components as Utility Computing, Services-Oriented-Architecture (SOA), Open Source, and Software-as-a-Service (SaaS).

Saugatuck research indicates that the resulting, increasingly "hybrid" nature of IT environments and usage is, in turn, changing the relevance of conventional IT cost metrics. Further, C-level executives continue focusing less on cost and ROI metrics and more on revenue and business improvement. Accordingly, acquisition decisions and RFPs should focus less on traditional cost metrics and more on costs of usage.

05-25-07 SaaS: Getting What You Pay For (C. Burns, M. West, B. Guptill, 4 pages, STR-350, $$$)

Increasing adoption of Software-as-a-Service (SaaS) is providing users and providers with ample opportunity to learn that there are many conventional and some new contractual provisions to be considered. Interestingly, the combination of software and service which help define SaaS can cause even familiar, conventional provisions to be co-mingled in new ways.

05-25-07 SaaS Adoption in Europe: A Closer Look at Rapid Growth (M. West, M. Koenig, 5 pages, MKT-349, $$$)

While SaaS adoption has been exploding across all market segments in North America over the past two years, a quiet but steady growth in demand has likewise occurred in Western Europe.

In fact, our data suggest that European SaaS adoption will follow very similar patterns to what has occurred in North America, albeit with a 12-18 month lag. While the data initially surprised us, upon further analysis we believe it reflects the increasing level of comfort that centralized IT organizations have throughout the world, with SaaS increasingly being viewed as just another important arrow in their solution quiver.

05-18-07 VMware Analyst Event Indicates Technology, Offering and Competitive Direction (C. Burns, B. Guptill, 4 pages, MKT-347, $$$)

On May 3, 2007, VMware hosted an analyst update in Boston. The company presented information on its corporate direction, business strategy, technology strategy, and associated products, channel and alliance efforts. In short, VMware plans to capitalize on short-term server virtualization trends while planning for a much broader, deeper "virtual infrastructure" management future.

05-03-07 SaaS Pricing: The Value Metric Is Only the Tip of the Iceberg (M. West, 6 pages, STR-344, $$$)

The most effective SaaS pricing exploits metrics that successfully relate to the value the user perceives – varying relative to the nature and value proposition of the SaaS solution. While appealing to the customer’s perception of value, a value metric should also align with the SaaS provider’s business model. In this sense, SaaS pricing differs from perpetual-license software pricing in a very significant way: the cost of running the datacenter and business operations must be covered by the SaaS subscription and other related service fees.

04-30-07 A New Wave in Analytics: Unified Performance Management (M. Koenig, B. Guptill, 4 pages, STR-341, $$$)

User enterprise spending on business intelligence (BI) and business/corporate performance management (BPM/CPM) software tools and solutions continues to increase, while satisfaction with most solutions falls short. User enterprises typically need a heavily-customized combination of broad and specialized software tools and solutions in order to realize their management goals, especially as pertains to performance management.

It’s not that the vendors cannot deliver value – all of them can and do, albeit often with significant "tweaking" of their offerings. The key drawbacks for most analytics offerings are that they tend to require significant customization and are focused on only one aspect of BI or performance at a time. Meanwhile, user executives want and need to manage multiple aspects simultaneously – and would like to do so without revamping/re-customizing the same solution(s) over again. They seek unified solutions. 

04-23-07 Open Source Business Models: Riding Multiple Horses (B. Guptill, 5 pages, STR-339, $$$)

IT vendors, including ISVs, systems vendors, hosting providers and others continue to seek "the" business model that will deliver the most benefits from open source-based software. While a variety of models are emerging – no single model is going to be ideal for all or even most situations. The choice of the most appropriate model(s) will depend on the role of open source within the vendor business and offering architectures. Since these often change, vendors will need to adopt, adapt and refine open source business models multiple times over the years in order to optimize them – and then be ready to do it all over again.

04-18-07 SaaS’ Third Wave: On The Road To Personalized Workflows (M. West, B. McNee, M. Koenig, 5 pages, MKT-337, $$$)

SaaS is on the verge of its next major transition, beyond its early roots in delivering cost-effective stand-alone business applications (Wave I), and its current focus on delivering integrated business solutions enabled by web services APIs and ESBs (Wave II). SaaS’ next major transition – Wave III – will deliver customized and personalized business workflows, and collaboration-enabled business transformation. As we near the midpoint of 2007, we find ourselves on the verge of Wave III – an ideal vantage point from which to consider where SaaS is headed.

04-12-07 Does A SaaS Explosion Imply A Hosting Implosion? (C. Burns, M. West, 5 pages, STR-336, $$$)

In April 2006, Saugatuck research projected the evolution in the Software-as-a-Service (SaaS) market from "point solutions" to broader "business process solutions" along with an associated emergence of the SaaS Integration Platform (SIP) (see SaaS 2.0: Software-as-a-Service as the Next Gen Business Platform, SSR-239, 16Apr07). Since that time, SaaS provider announcements and strategies have substantiated those projections.

In February 2007, Saugatuck again surveyed customer executives about SaaS. Not surprisingly, responses both defined SaaS adoption across a broad range of business processes and provided clarity about the functionality that customers desire from SaaS providers.

Over the next several weeks, based on our continuing research, Saugatuck will be publishing thorough assessments of various aspects of the ongoing growth and evolution of the SaaS market. This Perspective focuses on one aspect of the impact SaaS will have on the IT industry: What are the implications of SaaS for hosting providers?

03-30-07 C-Team Research: "Performance Gap" in IT Functions Means Opportunity for IT Outsourcing Vendors (M. Koenig, 6 pages, MKT-333, $$$)

Last month, Saugatuck published C-Team Research: "Performance Gap" Reveals Business and IT Misalignment - and Opportunities for IT Vendors, MKT-322, 22Feb2007.  That Strategic Perspective examined recent research that indicates substantial misalignment between Business and IT. Basically, C-level executives believe that their enterprises are not effective enough at executing the IT strategies that are most important to achieving enterprise business goals. At the same time, these executives believe their enterprises are more effective than necessary at executing less-important IT strategies. Saugatuck named this misalignment the "Performance Gap" (see Appendix).

This month we return to the Performance Gap. This Strategic Perspective presents Saugatuck research and analysis focusing on the gaps between the Importance and Effectiveness of enterprise IT Functions related to business strategy and goals.

03-27-07 SaaS Adoption Tsunami: Redefining Software and Services (M. West, 6 pages, MKT-331, $$$)

Customer adoption of SaaS is now on a steep and rising curve across all customer segments. Our research shows greater than 26 percent of companies now have at least one SaaS application installed, up from 11 percent a year ago, with another 20 percent either prototyping, implementing or planning to install their first SaaS application later this year. 

This data reconfirms our recent assessment that SaaS is now beyond the "tipping point". This applies not only to the North American market (where adoption rates are even higher), but what appears to be an emerging breakout scenario for Europe, which is poised for equally rapid growth 2007-2008. This Strategic Perspective provides a detailed look at SaaS adoption – today and in the future – across a number of key dimensions (e.g., by customer segment, by region).

03-15-07 IT Insights and Trends: Vertical Industry IT Spending Priorities Differ Widely (B. Guptill, 4 pages, MKT-329, $$$)

While Business Intelligence, ERP, and Data Warehousing rank as the top IT spending priorities among user IT executives worldwide, the prioritization of IT spending by user enterprises for 2007 differs significantly by industry.  None of the five major industry segments included in Saugatuck’s annual IT Trends survey match the overall IT spending prioritization, and only one – Services – even includes three of the top five overall spending priorities.

03-14-07 Oracle-Hyperion: Saugatuck Impact Assessment (B. Guptill, 4 pages, MKT-328, $$$)

With some of the dust settled from the announcement of Oracle’s planned acquisition of Hyperion, we examine key reasons behind the announcement and acquisition, and assess likely effects on competitive and user markets. Our key expected impacts include:  

02-28-07 C-Team Research: Bottoms-Up – Looking at Low-ranking IT Management Challenges to Find High-impact Surprises (B. Guptill, 5 pages, STR-324, $$$)

As part of our recent C-level executive survey program Saugatuck and BusinessWeek Research Services (BWRS) asked more than 400 CEOs, COOs, CIOs, CTOs, CFOs and CMOs, and more than 150 senior IT executives to rank how challenging they expect a series of 13 typical IT initiatives to be in 2007.

But often, we look only at top-ranked issues for insights into management challenges being faced, and the potential effects on user enterprise and IT vendor strategies and tactics. We can frequently learn much about users, enterprises, and markets by looking at the bottom of the pile.

02-22-07 C-Team Research: "Performance Gap" Reveals Business and IT Misalignment - and Opportunities for IT Vendors (M. Koenig, 5 pages, MKT-322, $$$)

Recently-completed Saugatuck research, conducted in partnership with BusinessWeek Research Services (See Note 1), reveals substantial misalignment between Business and IT. In short, C-level executives believe they are not effective enough at executing IT strategies that are most important to achieving their business goals. At the same time, they are more effective than they need to be at executing IT strategies considered less important.

Saugatuck refers to this misalignment as the "Performance Gap." The Performance Gap is an indicator of how well aligned IT strategy (or business process) performance is with IT strategy (or business process) importance. Saugatuck believes that as companies execute on their IT strategies, these misalignments will quickly become apparent. Enterprises will invest to bring their execution capabilities into alignment with the level of importance of each strategy across the entire IT strategy portfolio. These investments represent opportunities for IT vendors and services providers.

02-22-07 IT Insights and Trends: On the Road to Utility Computing - How Far is Far Enough? (C. Burns, 5 pages, STR-321, $$$)

Saugatuck recently asked IT executives about their plans for adoption of virtualization and for adoption of a Utility Computing infrastructure.

Responses yielded a noteworthy characterization: Server virtualization appears to be quite attractive in the near term; however, full Utility Computing appears to be only mildly attractive with a longer planning horizon.

02-20-07 C-TEAM Research: Innovation - IT and Marketing Misalignments May Affect IT Investments (M. West, 4 pages, MKT-319, $$$)

Recently completed research of C-Level executives conducted by Saugatuck in partnership with BusinessWeek Research Services (See Note 1) reveals fundamental disagreement at the C-level regarding the role of Innovation, the types of Innovation important to the organization’s success, and the barriers to Innovation in organizations. The divergence appears most dramatically between CIO/CTOs on the one hand, and CMOs on the other. The effects will range from user difficulty in funding innovative uses of IT, to changes in how – and to whom – IT vendors sell solutions and services.

01-31-07 Open Source Critical Realities: The Effectiveness Gap (B. Guptill, 4 pages, MKT-316, $$$)

As noted in Saugatuck Perspective MKT-314 published earlier today, Open Source-based software is rapidly gaining acceptance, and deployment, in user markets. Strategic commitments to Open Source by most leading, brand-name software and services vendors ("Master Brands" in Saugatuck parlance) made headlines throughout 2006, and strengthened user belief that Open Source may really be "ready for prime time."

But is it? Can open source software deliver in critical business environments? As part of our ongoing user executive surveys and interview programs, Saugatuck has gathered insights from IT executives worldwide regarding their experiences in implementing and managing Open Source-based software in a wide variety of business-critical environments.

The bottom line is that Open Source-based software can deliver the reliability and performance required in business-critical environments. However, there are caveats; "some assembly is required," to quote more than one IT executive with extensive implementation experience.

01-31-07 Virtualization Considerations: Forewarned is Forearmed (C. Burns, M. West, B. Guptill, 3 pages, STR-315, $$$)

Recent Saugatuck interviews have shown that users are continuing to adopt server virtualization in pursuit of reduced IT infrastructure costs and server consolidation. Additional probing has uncovered some consistent issues which should be recognized early and resolved during the transition.

01-31-07 Open Source: Looking Back on a Disruptive Year, and Forward to More (B. Guptill, 4 pages, MKT-314, $$$)

Saugatuck made a series of positions and predictions on a variety of Open Source market issues throughout 2006. Here, we look back at what was expected, what actually happened – and what it means for users and vendors through 2007.

01-16-07 Workday: A Year-end Chat With Dave Duffield and Aneel Bhusri (B. McNee, M. West, 8 pages, EVT-308, $$$)

11-22-06 Eight Key Global Trends – And What They Mean To The Consulting and Outsourcing Industry (B. Digrius, 6 pages, STR-294 $$$)

Important macroeconomic, social and business trends are profoundly reshaping the consulting and outsourcing (OS) businesses. Here we leverage eight of ten key global trends identified by McKinsey & Company (see Figure 1) that we believe will have the most impact on the consulting and outsourcing business, and relate them to key actions that IT users and service providers should embrace for continued success.

11-07-06 Understanding and Managing the IT Utility Attraction (C. Burns, 4 pages, STR-290  $$$)

Users are expecting and demanding the benefits of utility computing, regardless of their organization’s current ability to deliver them. This is partly an outgrowth of continuing hype and promotion of the concept by vendors and industry analyst firms, but also due to some very important motivations. The most significant of these drivers are:

10-30-06 Will Oracle Kill Open Source? The Bold Move Against RedHat and the Future of Enterprise Open Source (B. Guptill, M. West, 5-pages, EVT-287 $$$)

Oracle Corp. has announced plans to license, brand, and distribute RedHat Linux. As part of its branded Linux distribution, Oracle plans to offer technical support at half of what RedHat itself charges to customers. Technical support services, including implementation and bug fixes, are a primary source of RedHat's revenue.

Due to the terms of its open source license, RedHat cannot effectively prevent Oracle from licensing, reselling, and supporting its version of Linux.  In effect, RedHat - and almost any other open source software developer or distributor - provides well-positioned competitors, especially large IT "Master Brands" such as Oracle, with the ability to compete directly, and possibly to put them out of business.

10-27-06 "Laws" for IT Marketers and Users – Part II (B. Guptill, 5 pages, STR-286 $$$)

Last month, we introduced the first of a series of "Laws" for IT usage, management, and marketing. The first such were based loosely on well-known scientific "laws" of the physical universe, developed by Isaac Newton and others by observing and analyzing. Decades of doing the same as an IT user, executive, marketer, researcher and strategist have provided Saugatuck’s Managing Director Bruce Guptill with the foundations of similar "laws" for IT usage, governance, and markets.

This Perspective builds on the first, adding four more sets of observance and guidance for user and vendors in basic IT management and markets. 

10-27-06 Making Gain Sharing a Viable and Profitable Contracting Option for Outsourcing Engagements (B. Digrius, M. Koenig, 9 pages, MKT-285 $$$)

Gain sharing is a promising but underutilized approach to contracting between IT users and consultants or outsourcers.

This perspective will examine why gain sharing has been used so rarely in consulting and outsourcing contracts, and will introduce a framework that IT services providers can use to determine whether or not a project is a good candidate for what can be a very rewarding arrangement for both parties.

10-26-06 Salesforce Dreams Big at Dreamforce as SaaS Looms Large (M. West, B. McNee, 9 pages, EVT-284 $$$)

More than 5,000 users attended the Dreamforce conference at the Moscone Center in San Francisco, October 8-11, 2006. Salesforce made several key announcements concerning the Winter ‘07 new release, the Apex multi-tenant programming language and platform, the Apex Alliance of partners, customers and venture capital firms and the new program of AppExchange incubators.

In response to CEO Marc Benioff’s suggestion, we interviewed 20 Salesforce customers at random regarding SaaS (and Salesforce.com) benefits, Salesforce.com functionality, future adoption plans for SaaS, last winter’s Salesforce.com outages, and attitudes toward multi-tenancy and data privacy issues. We present those findings in this Strategic Perspective, assessing the evolution of SaaS, as well as some key challenges facing Salesforce as SaaS looms large in enterprises of all sizes, worldwide.

10-20-06 SaaS and SOA on a Collision Course in the SOA Enterprise (West, Guptill, McNee, 5 pages, MKT-282 $$$)

The end-user driven acquisition of multiple SaaS standalone applications is quite definitely opposed to the burgeoning IT initiative toward Service Oriented Architecture (SOA) – which is based on message-based services (components) with the end goal of a well-architected, integrated and maintainable systems architecture that can respond flexibly and rapidly to the need for business change. However, Saugatuck believes the emergence of SaaS 2.0, the increased use of Web Services, the maturing of SaaS Integration Platforms (SIPs) and the leveraging of Extended-Enterprise Service Buses (X-ESB) may allow these two realms to co-exist successfully.

09-27-06 What are Multi-Tenancy and Hybrid-Tenancy? And Why Should SaaS Buyers Care?  (West, McNee, 5 pages, STR-275 $$$)

The first wave of SaaS introduced "Multi-Tenancy," which early adopters have accepted in exchange for lower costs. However, as SaaS penetration goes deeper into the mainstream, more conservative buyers -- and their IT departments – are insisting on greater control and customization of SaaS data, leading to Hybrid Tenancy implementations as we move toward SaaS 2.0.

09-26-06 Basic "Laws" for IT Marketers and Users: Part 1  (Guptill, 4 pages, STR-274 $$$)

Isaac Newton and others developed what we often refer to as the "laws" of the physical universe by observing and analyzing. Decades of doing the same as an IT user, executive, marketer, researcher and strategist have provided Saugatuck’s Managing Director Bruce Guptill with the foundations of similar "laws" for IT usage, management, and marketing.

This Perspective looks at the first three Laws developed or adapted by Bruce over the years. Based loosely on Newton’s well-known Laws of Motion, they provide useful, though somewhat tongue-in-cheek, insights into what really happens with IT in the marketplace, why, and how users and vendors can effectively manage to their own advantages. A second Perspective will introduce additional Laws that build on other familiar scientific observances.

09-25-06 Consumerization of IT Raises User Expectations, Creating Vendor Opportunities  (Koenig, 5 pages, MKT-273 $$$)

Beginning with desktop PCs and spreadsheets, end users have been the "side door" through which many new technologies have infiltrated the enterprise.  Yielding (reluctantly) to practicality, IT departments periodically acknowledge this, and rise to the challenge of officially adopting and integrating these new technologies. The best have found ways to incorporate these disruptions to improve the business environment, productivity, and customer service across the enterprise.  Recognizing this, IT vendors have stepped up efforts to enter business markets through this unofficial entryway. More and more, vendors market IT products and services by appealing to consumers, gambling that personal adoption and use will lead to widespread adoption in the enterprise.

09-13-06 Challenge and Response: Saugatuck Principals Debate Google’s Impact (Koenig, Guptill, 4 pages, MKT-270 $$$)

As a research-driven strategy consultancy, Saugatuck spends a great deal of time examining vendor business and competitive models, scenarios for success and failure, and other factors that influence markets, vendors and users.

Lately, interpreting the influence and significance of Google has become an IT industry pastime. Analyst firms, competitors, trade journalists and bloggers are weighing in on the impact of Google on everything from basic search to advertising and media, to software-as-a-service, and beyond.

Saugatuck principals Bruce Guptill and Mark Koenig have prepared this "point-counterpoint" Perspective around some important company and industry challenges (and assertions), to add Saugatuck’s voice to the debate, and to reflect the range of opinion concerning Google’s potential short- and long-term impact. In this piece, we present two divergent points of view – one essentially believing that Google will significantly challenge the status quo, the other seeing Google as more challenged than challenging.

08-30-06 Evolving Security to Meet the Needs and Vulnerabilities of SOA (West, 4 pages, MKT-267 $$$)

08-24-06 Vendor Alliances: Annual Audits Can Yield Big Results (Dirius, McNee, 6 pages, STR-266 $$$)

Alliances are market-focused business relationships between two business entities. They span the spectrum from "we’ll pass leads to you" sealed with a handshake to joint ventures that are complex to set-up and govern, and require absolute commitment from both entities. 
While alliances can cripple a firm if not done correctly, or conversely can help a firm do something important that it couldn’t do alone – constant monitoring and fine-tuning through the use of a consistent audit process or framework can yield significant results. This Strategic Perspective highlights a successful approach that we have taken with several clients, called the Alliance Relationship Audit (ARA).

08-21-06 Key Vendor Differentiators: Beyond Price, Performance, and Features (Guptill, 5 pages, STR-264, $$$)

Ongoing Saugatuck research programs with user IT, business and Finance executives indicate that IT vendors continue to struggle with differentiating themselves. Vendors present users with an increasing variety of offerings – including product and service features, vertical industry-specific "solutions," and lately, services-based software and hardware offerings – all at lower prices than last year’s model.

But IT buyers, influencers, and decision makers tell Saugatuck that they see enough from vendors to the point where these "differentiators" make the vendors look alike.

08-16-06 Surmounting Short-Term Barriers to SaaS Integration (West, 4 pages, MKT-262 $$$)

Accelerating market adoption of Software-as-a-service (SaaS) increasingly points for the need for deeper and richer SaaS integrate capabilities, both with other applications in the IT systems portfolio and with other SaaS applications.  While SaaS "poster child" Salesforce.com has already implemented solutions for more than 444,000 subscribers at 22,700 companies worldwide – most of these deployments have been stand-alone application silos.

08-10-06 SOA Roadmaps, Maturity Models and Guides: All Works In Progress  (O'Flaherty, McNee, Guptill, West,  10 pages, MKT-261, $$$)

07-27-06 Application Outsourcing Turns Mission-Critical (Koenig, 5 pages, MKT-258, $$$)

Earlier this year, Saugatuck conducted a web based survey of 158 US-based business and IT executives to gain a better understanding of how and when they plan to use Application Outsourcing services (see Appendix I).  The results of this work, combined with interviews with more than a dozen IT and LOB executives conducted in June and July, indicate significant shifts in plans and priorities for enterprise users over the next two years; these shifts suggest that the decision to contract for Application Outsourcing services is becoming more strategic.

07-19-06 SaaS Integration Platforms: The Looming SaaS Deployment and Support Dilemma (West, 7 pages, STR-255, $$$)

Software-as-a-service (SaaS) implementations today deliver benefits to user firms via relatively simple, readily-recognized business benefits. SaaS 2.0 will deliver significantly greater value via integration with other SaaS offerings as well as with legacy technologies, applications, data and business processes. The required, complex mix of integration technologies and services will best be delivered via what Saugatuck has termed SaaS Integration Platforms (SIP). As users continue to add SaaS applications, SIPs will play critical roles as solutions hubs that provide integration, delivery, and management services.

07-06-06 Saugatuck Roundtable: Do User Enterprises and IT Vendors Need to Change Their Business Models for IT Contribution to Advance? (Guptill, Rogow, 6 pages, MKT-253 $$$)

In early June, Saugatuck Technology hosted a roundtable discussion on emerging IT challenges and perspectives. The discussion centered on CIO research developed and presented by Saugatuck contributor Bruce J. Rogow (see Note 1) and contained in his 2006 IT Odyssey Landscape observations. Helping to lead the roundtable discussion was Saugatuck’s Bruce Guptill, joined by Saugatuck colleagues Bill McNee, Mark Koenig, Jim Cassell and Charlie Burns, as well as Saugatuck Research Fellow Erik Keller, author of the recent book Technology Paradise Lost.

06-12-06 CPM: Let it Happen . . . Strategically (Guptill, 4 pages, MKT-248 $$$)

Corporate Performance Management (CPM) is seldom deployed as a "big-bang" enterprise initiative – and instead is gaining traction at most firms around "point" data reporting, analysis, or planning projects. As a result, most executives are "backing into" CPM, rather than creating and executing an enterprise CPM vision.

05-25-06 Utility Computing: A Definition, A Path, and THE Challenge (Burns, 6 pages, MKT-245 $$$)

05-16-06 Open Source's Impact on Utility Computing (Cassell, 5 pages, MKT-242 $$$)

At the annual LinuxWorld Conference and Expo in early April, virtualization was THE hot topic. Major announcements were made by Open Source Software (OSS) providers of virtualization technologies as an alternative to VMware. Saugatuck Technology believes that this is a clear indication that Open Source technologies will be accepted by vendors of systems management offerings that enable a Utility Computing strategy, likely reducing costs and accelerates availability of required function.

04-28-06 Enterprise Upgrades: The Next IT Innovation Tsunami? (Keller, 4 pages, MKT-238 $$$)

03-09-06 Saugatuck Roundtable: How will IT Spending Fare in 2006 vs. Overall Capital Spending and other Competing Priorities for Corporate Cash? (Guptill, McNee, Koenig, Cassell, 9 pages, EVT-230 $$$)

As the world economy continues to improve, more and more firms have amassed large cash positions on their balance sheets. Saugatuck Technology recently convened a roundtable discussion in mid-February with its team and several leading investment research analysts and venture investors to understand whether or not this will create a windfall for IT investment in 2006 and beyond.  This Strategic Perspective presents insights and analysis shared in that discussion.

02-16-06 Key Trend for 2006: User IT Choices Center on Flexible Deployment (Guptill, Cassell, McNee, Koenig, 6 pages, MKT-226 $$$)

Saugatuck Technology surveys and executive interviews clearly show that choice has become a key factor in user IT investment decisions. This desire is being driven by increasingly flexible options in the delivery and use of IT, and by continuing user executive focus on cost management. It is supported by the continuing trend of moving away both from traditional data centers to distributed computing, and from centralized business to distributed business processes and operations.

01-24-06 Executives Begin to Lay Strategic Foundation for the Future Even as IT Management Priorities and Initiatives Remain Tactical (Koenig, 6 pages, MKT-218 $$$)

Recent Saugatuck research indicates that IT Management Priorities and Initiatives will continue to focus on short term, definable programs with clear ROI. Saugatuck refers to this trend as "tactically strategic" IT investment. As in past years, longstanding tactical priorities and initiatives such as security, privacy and cost containment continue to top the list of IT priorities. Yet, the presence of business/IT alignment, along with data integration, BI and real-time information suggests that users are also looking to unlock the value of their business data.

These curr