Software Pulse

Business Strategy for Software Executives

September 11, 2006

Zach Nelson

The Future of On-Demand Software

As the market for on-demand and SaaS products takes off, it is critical to recognize what characteristics will distinguish the next generation of leading vendors.

By Zach Nelson, NetSuite

Larry Ellison once told me that one of the best things that ever happened to Oracle was for IBM to say it planned to build a relational database. Sure, a massive, wealthy competitor was entering Oracle’s market, but at the same time, IBM validated the need for its flagship product.

Everyone knows how that story ended: it took IBM many years to bring its relational database to market. In the meantime, Oracle sold them hand-over-fist to anxious enterprise buyers looking to leverage the latest technology.

On-demand software may have just reached this tipping point: Microsoft announced it plans to build a suite of on-demand business applications.

The good news? It took us eight years to build our on-demand suite at NetSuite. Will business buyers wait nearly a decade for Microsoft’s solution? Probably not. That means the on-demand vendors of today have a significant head start in the market.

The future of on-demand software will be even more compelling. The very nature of on demand dictates that its offerings must evolve to meet customer needs more frequently – and that will make for a tough game of catch-up for newcomers.


Webinar: The Path to Profit

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Trendwatching in BPO & Services

S. SadagopanShorter contracts. Multiple vendors. Continued talent shortage. More work for India – and more for China and “nearshore” destinations too... S. Sadagopan of Satyam runs through his list of 28 business processing outsourcing (BPO) and service market moves in this week’s post to his Blog, The Deep End.

The 3 Curses of Internet Success

One holdover from the dotcom era is the fact that many hotshot companies in emerging technology markets are “cursed” with success. Phil Bookman points out the dangers and some ways to avoid being “cursed” in this week’s post to the Blog on Software Finance.

The Linux Desktop Tipping Point

The evidence is piling up that a Linux desktop may not be far off. IBM announced a Linux client for Lotus Notes, IT departments are calling for one, and the kicker? The Asian market will demand it. Guy Smith of Silicon Strategies Marketing details why the Linux desktop tipping point may be closer than most want to admit in last week’s post to the Blog on open source.

Publish Your Perspectives!

The Blog wants your opinions. Send your thoughts on the enterprise software industry to and we’ll publish them in our blog.

Around the World in 7 Days

Lucent moves to Paris; new centers launched in Brazil, Shanghai, Singapore and Cochin; Britain lacks talent; DOS is back, new lawsuits are filed and old IPOs are withdrawn Read these stories and more software news of the week in the weekly news summary.

Don’t Miss: Getting the Most from Open Innovation

A typical large company can no longer rely solely on its own resources. Creation networks are a promising way to move beyond them. Read more about “Creation Nets” in this article from The McKinsey Quarterly.

Poll: What is Enterprise 2.0?

Experts are debating what – if anything - “Enterprise 2.0” will become. What do you think?
Take our Pulse Poll >>

Last week, readers gave their opinions as to whether a group of investors could buy Microsoft.
Give us your opinion and see the results >>

More at

Why Vista will mean the end of the Microsoft monolith.
Read the most important enterprise software industry news of the week >>

Applied Predictive Technologies receives $54 million.
Monitor the latest software venture capital deals >>

Cognizant Technology Solutions buys AimNet.
Size up last week's software M&A deals >>

Woodson Hobbs named CEO of Phoenix Technologies.
See who's made it to the top in our list of recent software executive appointments >>

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Parting Thought

“The trouble with most of us is that we would rather be ruined by praise than saved by criticism.”
– Norman Vincent Peale

Courtesy of Malcolm Kusher, The Kushner Group