Editor’s note: Here’s a round-up of software companies reshaping the industry in 2014. Our industry experts interviewed for this article discuss:
- The software aspect that will be on companies’ radar screens by the end of 2014
- The software industry event during 2013 that will have the most significant impact in 2014-2015
- What our interviewees would like to change about the software industry
- And NetSuite weighs in on how software companies will handle billing and revenue recognition, BI and CRM, and ecommerce self-service
Q. What software aspect do you think will be on companies’ radar screens at the end of 2014 that isn’t there at the beginning of the year?
Amr Awadallah, Chief Technology Officer, Cloudera:
On the radar screen will be how to live in a hybrid world between on-premises software, on-premises cloud and external cloud. That will start being a significant pain point as companies will have systems that span all three environments. There will be a dire need for management tools that can coalesce all three environments under one pane of glass.
Mike Hoskins, Chief Technology Officer, Actian:
Dataflow architectures — Given that the digital data tap has been turned on and will never be turned off and that data is constantly flowing at us from the Internet of Things and elsewhere, companies must rethink their too-static, too-rigid business intelligence and analytic software architectures. It’s no longer acceptable to have high-latency, batch-dominated monolithic platforms. As analytic workloads assume more prominence, as we refine crude data step by step into high-value information products and analytic outcomes, dataflow architectures will emerge as the natural paradigm for building the analytic pipelines needed to support a new generation of analytic applications.
Paul Ressler, Principal, The Cirrostratus Group:
Although it has always been talked about, data privacy and data security will have more emphasis as a result of the Edward Snowden leaks and recent information about NSA’s data-collection activities.
Guy Smith, Chief Consultant, Silicon Strategies Marketing:
Using technology/software to track non-digital customer activities will be on the radar screen. But that might require the assistance of the NSA.
Q. What event in the software world during 2013 do you predict will have the most significant impact in 2014-2015?
Paul Ressler, Principal, The Cirrostratus Group:
The most significant event in 2013 was that Oracle made several public announcements and specific steps to show that they are embracing SaaS and cloud computing. This will have a substantial impact in 2014 and 2015 as specific product initiatives occur and are put in the market.
Mike Hoskins, Chief Technology Officer, Actian
The advent of YARN is a game-changer, a milestone that will alter the Hadoop landscape forever. No longer will developers be forced to work only with primitive, low-performing MapReduce as the sole “engine” to tackle data and computationally intensive tasks. YARN will allow a thousand flowers to bloom, a whole new class of extreme high-performance engines optimized with vastly greater efficiency, often coupled with intuitive visual frameworks, deployed as first-class citizens on your Hadoop cluster where your data increasingly lives. An example of this is Actian’s new YARN-certified ParAccel Dataflow engine.
Amr Awadallah, Chief Technology Officer, Cloudera:
Collectively, the successful IPOs by Workday, ServiceNow, Splunk, FireEye, Tableau, Palo Alto Networks and others (after a period of hiatus) will reignite significant investments in enterprises software companies across the spectrum from small startups to larger pre-IPO companies.
Guy Smith, Chief Consultant, Silicon Strategies Marketing:
The most significant event is Steve Ballmer exiting Microsoft. Little good occurred for Microsoft under his watch — they completely missed mobile, soft-stepped Big Data, slow-responded to Google … well, it has been ugly. Ballmer may only be part of the problem, but he is not part of the solution.
Q. If you could change something about the software industry in 2014, what would it be?
Amr Awadallah, Chief Technology Officer, Cloudera
Two things: (1) Patent trolls be dead, in fact, patents be dead. (2) Vendors stop announcing stuff that doesn’t even exist yet (vaporware). Announce stuff when it is in beta stage with customers, but not before. No more false promises, please.
Guy Smith, Chief Consultant, Silicon Strategies Marketing
I long for rapid adoption of HTML5, CSS3 and related tools as the de facto UI, though adding a singular open source framework would also be nice. There remain too many technologies, which depletes the available developer pool and diminishes the depth of their expertise. Consolidate around something that could be nearly universal.
Q: What can the industry expect your company to focus on in 2014?
Mike Hoskins, Chief Technology Officer, Actian
We will extend Actian’s investment in advanced analytics while facilitating the coupling of discovery and operational analytics. We’ll also advance the Actian DataCloud market leadership by bringing Invisible Integration to all of the top SaaS companies. And we’ll capitalize on Actian’s best-of-breed ParAccel columnar analytic database, which powers Redshift, by expanding that ecosystem.
Tim Yeaton, CEO, Black Duck
Black Duck is a very unique company; we are the leaders in enabling organizations to effectively use open source technologies and methods as part of their software development and deployment strategies. Consequently, our priorities in 2014 are fairly specific to this mission. The first priority is to continue to educate the market about the benefits of using open source technologies and methods strategically. Our best practices customers, across industries, are able to utilize as much as 80 percent open source in their custom development, which gives them tremendous development leverage in creating true business value.
The second priority is to address the needs of companies looking to apply open source style collaborative development, sharing and reuse approaches to their internal development processes. We’ve had an extraordinary number of large companies seeking our help to do this recently, from both a best practices and product solutions perspective; and we are far along in developing new enabling solutions. We believe this trend toward social creativity via open collaboration is strongly on the upswing, and we want to help individual companies get the same results internally that open source projects and communities experience.
Third, we are investing aggressively in our core offerings to introduce next-generation analytics, governance and platform scalability to take our customers — a who’s who of the world’s largest software, technology and IT organizations — into the next decade, and as we scale to millions of open source projects and tens of millions of specific versions of those projects.
Dan Miller, General Manager, Software Vertical, NetSuite
NetSuite is focused on further increasing the cloud platform’s ability to scale to extremely high transaction volumes, in the range of more than 50 million journal entries per year, to accommodate enterprise-scale software companies and fast-growth global businesses.
We also have resources committed to further refining and building out our integrated billing and revenue-recognition capabilities to offer our software customers even more process efficiency, precision and flexibility and to further enhance our cloud professional services automation (PSA) offering, especially important for embedded services teams at software companies.
Thirdly, we’re focused on expanding and strengthening our partnerships with ISVs, solution providers and global systems integrators. For instance, we recently launched a new “Built for NetSuite” program to validate the quality, security and privacy of third-party ISV applications and have rolled out NetSuite ERP Consultant Certification, a testing-based program for consultants to prove their expertise in NetSuite ERP implementations and optimization.
Amr Awadallah, Chief Technology Officer, Cloudera
In the area of workload management we’ll focus on the ability to run many applications, workloads or groups within the same Enterprise Data Hub (EDH) without having them step on each other’s toes performance-wise or quota-wise (true multi-tenancy). We’ll also work to ensure stronger security for the EDH that rivals what is provided by legacy solutions. That includes granular access control (at the column/cell level), and role-based authentication. This in turn enables multi-tenant environments to run successfully, as the users can’t poke into each other’s data sets. Finally, we’ll focus on overall hardening of the EDH to make it easier to use, more reliable and available. This also includes enriching the platform from a functional point of view to make it competitive to standard features available in legacy solutions.
Paul Ressler, Principal, The Cirrostratus Group
In 2014 you’ll see us using mobile to extend enterprise SaaS applications, SaaS data integration strategies and SaaS application performance.
How will software companies handle billing and revenue recognition in 2014?
Dan Miller, General Manager, Software Vertical, NetSuite
Software companies are getting smarter about how they handle billing and revenue recognition, BI and CRM, and ecommerce self-service. Each of these three areas relates directly to the outcomes that software companies achieve on performance, profitability and customer satisfaction. Billing is growing increasingly complex, with a mix of subscription, perpetual and term licensing in place at many software companies. Add in billing for professional services, training, events and, for some vendors, hardware components, and billing becomes a huge problem that can undermine efficiency and revenue recognition while introducing the risk of errors and customer dissatisfaction.
In 2014, we will see more and more vendors replacing disjointed billing silos with a consolidated solution tied natively to revenue recognition and the core financials.
The new year will also see more software companies seeking analytics utilizing cloud technologies. Vendors will enhance their focus on better BI and CRM capabilities, linking them to financial and operational input and output metrics, optimizing profitability, which requires deep insights into per-unit economics to evaluate overall cost and revenue, customer lifetime value, cost per acquisition, cost to service (e.g., by tiered value ratings) and more. We’ll see more companies focused on enterprise-wide analytic deployments to improve decision making and streamline customer management, from lead to cash to maximizing customer lifetime value.
A third prediction relates to software companies evolving their commerce model. Customer satisfaction depends on delivering B2C-like self-service capabilities on the Web. Market-leading software companies will enable customers to easily add modules or seats in touchless Web transactions, cutting days or weeks out of the traditional account management process and reducing administrative time and cost for both vendor and customer.
Amr Awadallah is chief technology officer at Cloudera. Before co-founding Cloudera in 2008, Amr (@awadallah) was an entrepreneur-in-residence at Accel Partners. Prior to joining Accel he served as vice president of product intelligence Engineering at Yahoo!, and ran one of the very first organizations to use Hadoop for data analysis and business intelligence. Amr joined Yahoo after they acquired his first startup, VivaSmart, in July of 2000.
Mike Hoskins is chief technology officer at Actian and Actian’s technology innovation strategies and evangelizes trends in big data, and cloud-based and on-premises data management and integration. Mike is a respected thought leader who has been featured in TechCrunch, Forbes.com, The Register and Scobleizer. He speaks at events worldwide including Strata, DeployCon, and Structure Big Data. Mike received the AITP Austin chapter’s 2007 Information Technologist of the Year Award for his leadership in developing Actian DataRush. Follow Mike on Twitter: @MikeHSays.
Dan Miller is general manager, software vertical at NetSuite. He brings over 25 years of professional experience to NetSuite, most recently as SVP and CFO of Nexant where he managed accounting and IT corporate service groups, and led financing initiatives to support strategic growth plans. He began his career as a senior accountant with Deloitte & Touche, subsequently serving as senior treasury manager for Genentech and corporate controller for Extreme Networks before moving to executive roles.
Paul Ressler is a consultant specializing in service delivery for SaaS, cloud computing and managed services. As the principal of The Cirrostratus Group, Paul helps his clients improve customer satisfaction, raise service margins, introduce profitable new services and transition to the SaaS business model.
Guy Smith is the chief marketing strategist and founder of Silicon Strategies Marketing. He is also the author of the Start-up CEO’s Marketing Manual (available in print and Kindle editions), a rapid-fire boot camp to ensure that founders will guide their teams and marketing employees away from the common cliffs of epic failure.