Microsoft is working to improve SaaS security, shifting to “to a comprehensive SaaS security solution.”
Software as a service is an increasingly important part of the remote and hybrid workplace, and is only growing in popularity. Unfortunately, properly securing SaaS applications can be a logistical nightmare. In fact, citing research from Better Cloud, Microsoft points to the 59% of security professionals that struggle to manage SaaS security.
Microsoft believes the key lies in protecting data within cloud apps, rather than just focusing on cloud access security. The company has expanded the scope of its Defender for Cloud Apps to help provide that layer of security.
Today, we are excited to announce that Defender for Cloud Apps is extending its SSPM capabilities to some of the most critical apps organizations use today, including Microsoft 365, Salesforce,3 ServiceNow,4 Okta,5 GitHub, and more.
Another important component of Defender for Cloud Apps is the ability to help personnel research configuration best practices for SaaS app security.
To streamline this process, Defender for Cloud Apps launched SSPM in June 2022 to surface misconfigurations and provide recommendations to strengthen an app’s posture.
In preview starting today, Defender for Cloud Apps now provides security posture management for Microsoft 365, Salesforce, ServiceNow, Okta, GitHub, and more. Not only are we expanding the breadth of app coverage but also the depth of assessments and capabilities for each application.
The tight integration within Microsoft 365 Defender will give organizations security across the full scope of their operations.
That’s why Defender for Cloud Apps is natively integrated into Microsoft 365 Defender. The XDR technology correlates signals from the Microsoft Defender suite across endpoints, identities, email, and SaaS apps to provide incident-level detection, investigation, and powerful response capabilities like automatic attack disruption. The integration of SaaS security into an XDR experience gives SOC teams full kill chain visibility and improves operational efficiency with better prioritization and shorter response times to ultimately protect the organization more effectively.
When it comes to something as inherently fluid as SaaS (software-as-a-service) development, it’s important to acknowledge that you’re talking about designing and coding applications in multiple stages and cycles. For this to be successful, it requires a foundation of processes to be put in place to make the project run efficiently, all while reducing error as much as possible.
Thankfully, there are a number of solutions that can help make this process far easier to that end. What follows is a list of some of the best SaaS development solutions that will assist software development teams with improving their processes across the board.
Preview Environments
One of the key SaaS development solutions that can help improve a team’s processes has to do with preview environments. These are on-demand, cloud-based environments that allow for the testing of new features before they’re merged together into the larger solution.
They’re designed to be short-lived and used for a single purpose – indeed, they only exist as long as they’re needed to test a new feature, address a bug, and perform similar tasks. Not only can they dramatically reduce the amount of time it takes for troubleshooting, but they also speed up the process of merging new features together as well.
The Power of Dashboards
Because of the very nature of SaaS development, it’s always important to maintain a “bird’s eye view” of what is going on. But with so many different people working simultaneously on disparate tasks, doing so via the “old school” method of constant emails and progress meetings can only delay the proceedings, not help speed them up.
That’s why custom dashboards are so good for this particular use case. Not only can they help you keep track of every task someone is working on, but they can let you see as much as possible at a glance about the project as a whole. You can see if people are on task with the deliverables they’ve been assigned and, if they’re not, you can easily check in to see if any assistance is needed before things get delayed too much.
Many dashboard solutions also allow you to create your own custom widgets so that you can have the metrics that matter most to you rise to the forefront. You can use pie charts, graphs, and more – all to visualize project data in a way that makes it easy (and instant) to see how far you’ve come and where you still need to go.
Communication is King
Another one of the keys to success in terms of SaaS development involves creating an environment where constant communication isn’t just a recommendation, but a requirement. That’s why, especially during an era when more people are working remotely than ever, companies regularly rely on communication tools like Slack to bring everyone together again – albeit virtually.
A tool like Slack is a great way to constantly check in with one another via live chat. It can also be used as a file sharing solution as well. If you’re looking for robust video conferencing capabilities, you might also explore options like Microsoft Teams, Cisco WebEx or even the ever-popular Zoom.
Regardless, making sure that team members have access to the tools needed to communicate goes a long way towards improving collaboration as much as possible. This in and of itself can lead to more efficient processes (and a higher quality of work output) before you know it.
Embracing Automation
As is true with most types of software development, there are certain tasks and processes that – while important – can be time-consuming to say the least. There’s where automation via a tool like Quixy will absolutely come in handy.
Quixy (or any other automation solution) can help streamline processes by automating a lot of those manual tasks that eat up a lot of a developer’s time. This in turn allows them to focus more of their attention on the matters that truly need them. Quixy in particular is also a highly customizable solution that includes advanced features like a rich text editor, e-signature capabilities for when it comes time to sign off on a deliverable, facial recognition, and more.
Cloud-Based Code Management
Finally, many SaaS development teams have found success in improving their processes with a tool like Cloud 9. This is a web-based platform that can be used for not only scripting, but also running and debugging code, all via the cloud. This also enables team members to work with Serverless applications, making the transition between local and remote activities as easy as possible. All told, it can be used to create a replica of the entire development environment – thus giving team members more control over what they’re working on and how they’re getting their critical work done every day.
In the end, these are just a few of the many SaaS development solutions that teams can use to help improve their processes. Having said that, note that it is entirely possible that not all of them will be equally valuable to all teams. You need to carefully consider not only the needs of the project, but the people who are working on it, when making a selection. Don’t select a SaaS development solution and hope it aligns with your requirements. Start with the requirements themselves and work your way backwards to the solution that checks as many of your critical boxes as possible.
According to a new report, software as a service (SaaS) adoption is slowing despite widespread popularity.
BetterCloud has released its 2023 State of SaaSOps report, shedding light on the SaaS industry. The report contains feedback from 743 IT and security professionals, providing valuable insights into the state of affairs.
Some 40% of those polled reported consolidating redundant SaaS apps, accounting for a significant slowdown in adoption. Despite the slower pace, adoption is still up 18% from last year, with organizations using an average of 130 SaaS apps.
Interestingly, despite the importance of SaaS, 59% of those polled reported it was a challenge to manage “SaaS sprawl,” with shadow IT being a prime culprit. Shadow IT refers to instances where departments within an organization deploy their own IT systems without the oversight of the IT department. Demonstrating the extent of the problem, respondents reported that 65% of all SaaS services are deployed without authorization from IT, raising additional security and privacy concerns.
In response to these challenges, IT departments are increasingly bringing SaaS services under their control, with 57% doing so in the last 12 months. Many IT departments are also turning to automation to help manage their SaaS services, with 71% having automated at least one help desk service and 43% having a dedicated SaaSOps automation role or team.
Despite the challenges, BetterCloud is optimistic about the future of the SaaS industry.
“This is our tenth year surveying IT about the SaaS-powered workplace and one thing remains true: SaaS is critical to doing business and to providing a better employee experience,” said David Politis, CEO, BetterCloud, in a statement to WPN. “Yet, in the last few years, the rush to adopt SaaS has outpaced IT’s ability to keep up with management and security challenges. Our research this year highlights these growing pains, but also shows that investments in automation are helping IT stay one step ahead of SaaS application growth.”
BetterCloud’s 2023 State of SaaSOps report is well worth a read and contains additional insights into the industry that every IT professional should know.
IBM and AWS have signed a collaboration agreement to provide IBM’s significant software catalog as Software-as-a-Service (SaaS) on AWS.
AWS is the leading cloud provider in the world and, while not cracking the top three, IBM is nonetheless a significant player. The company recently announced its intentions to split, with the core of the company focused on hybrid cloud offerings. While they may be competitors, that isn’t stopping the two companies from working together to provide IBM’s breath of software and tools on the AWS platform.
The agreement will cover IBM’s software for AI, automation, data, security, and sustainable capabilities. The solution is cloud-native on AWS, and is built on Red Hat OpenShift Service on AWS (ROSA).
The two companies have also agreed to work together on “a broad range of joint investments,” all with the goal of making it easier for customers to use IBM solutions on AWS.
“As hybrid cloud continues to become the reality for our clients, IBM is ready and willing to meet them with a flexible and cloud-native software portfolio wherever they are in the cloud or in data centers,” said Tom Rosamilia, Senior Vice President, IBM Software. “By deepening our collaboration with AWS, we’re taking another major step in giving organizations the ability to choose the hybrid cloud model that works best for their own needs and workloads, freeing them up to instead focus on solving their most pressing business challenges.”
“Our collaboration with IBM allows joint customers to accelerate their modernization to the cloud and consume IBM services in a cloud native manner on AWS,” said Matt Garman, Senior Vice President of Sales and Marketing at AWS. “Through our multiyear agreement, AWS will work with IBM to offer a broad array of IBM Software as SaaS on AWS. In addition, we’ll be working together on stronger joint marketing and co-selling programs for customers.”
SaaS companies are popping up all over the place right now, trying to take advantage of the substantial increase in demand for both business and consumer software solutions. Whether it is to make better use of data or to automate personal and professional processes, if you can design and market a good SaaS, you stand to make a lot of money. With that in mind, below are 5 SaaS development best practices.
Manage Your Models Well
Your choice of modeling options when coding is critical in software development for a variety of reasons. To begin, a software development model, also known as a Software Development Life Cycle (SDLC) model, is a procedure that determines the direction and outcomes of a project from the start. Once you’ve started with one model, it is difficult to switch to another, especially if you don’t have a good model registry in place.
Considerations include when you are able to do the testing, when you can make the presentation, which features are accessible to demonstrate to beta users, and so on are all considerations that go into the model selection. Reliability, accuracy, ease of use, and level of technical difficulty are also important considerations.
Start by Working Backwards
It is more crucial to develop the appropriate product than the right product. Great SaaS products, whether B2Bor B2C, make life easier for people because they alleviate a customer’s pain points and meet their business and personal requirements. Winning products are created when you thoroughly grasp the customer’s problem and create a solution for it.
The working backwards method begins with the client. Leading organizations employ this strategy to create new products as well as add functionality to current ones. The technology stack and implementation specifics are minor considerations. The essential thing is to solve the problem for your consumer and to do it better than the competition. Incorporate the solving of real market needs into your design, and you will more likely than not have something the market truly wants.
User-First Approach
Users nowadays are always on the go, connected, and expect excellent experiences from B2B or B2C SaaS companies. They want to know that their needs are your top priority, and they want to feel that in your user experience.
A SaaS solution must now provide an integrated, interconnected, and consistent user experience. Enterprises such as Slack, Dropbox, Amazon, and Google are examples of product-led companies that are obsessed with giving people exactly what they want. What’s more, your customers are unlikely to want to install a large number of corporate software programs, thus consistency and integration are critical.
Users want rapid satisfaction, and when a product has a steep learning curve or is difficult, they abandon it. Hooks for users must be dispersed throughout the UX, so they are kept engaged and satisfied. These hooks help users get started and take them intuitively through various tasks and processes in software.
Try to Launch Regularly
Once you have established and approved your product requirements, your next step should be to start testing the product with real users. It cannot be overstated how important it is to get your customers on board and encourage them to start using your product. By launching your product frequently and with consistent new features, you could add more value in the long run and make use of valuable feedback.
The speed at which you are able to roll out new value-added features will make the difference during the initial phase and help establish your brand name. When customers get access to a quality feature in 1 month, they become familiar with the product quicker, and you establish better brand recognition.
Have a Solid Differentiation Strategy
Every day, new SaaS solutions are released, yet the majority of them fail to fulfil market demands. Products that don’t set themselves apart and fail to excite clients are ignored quickly in the market. Competitive benchmarking assists a company in understanding what items are already on the market. They can create a plan for creating distinct products and more competitive value propositions for clients.
Your established competitors are a solid indicator of what customers already have. Customers will be hesitant to convert to your product if it does not provide a considerable improvement over what already exists out there. Organizations may produce better SaaS solutions that fill gaps by establishing a better understanding of existing products and the market environment—doing things better than the competition is always a solid branding move.
Conclusion
The SaaS development process takes time and patience, and there is often a considerable amount of rework and backtracking involved. Competition is stiff, and if you aren’t providing something that is superior to the already established competition, then why even bother? Keep the above development best practices in mind and set your SaaS up for success from the very beginning.
Software as a Service (SaaS) may be one of tech’s hottest fields, but it has a security problem, with 40% of data access unmanaged.
The report comes from DoControl, a company specializing in SaaS security. According to the company’s research, many organizations are opening themselves up to inside and external threats due to their handling of SaaS data.
Based on customer data, the findings clearly illustrate there is a magnitude of SaaS data exposure, with 40% of all SaaS assets unmanaged, providing internal, external and public data access.
The issue is a high-stakes one, with the average 1,000 person company using SaaS to store anywhere between $500K and $10 million in assets.
“The past year forced many organizations to collaborate with many external parties and adjust their existing workforce to support remote collaboration,” stated Adam Gavish, CEO and Co-Founder of DoControl. “To date, security practitioners focused on enabling SaaS access in a secure manner, now is the time for them to prioritize the relevancy of this data access internally and externally. Unmanageable data access poses a significant risk to any organization and increases the likelihood for a data breach. While SaaS apps are designed to promote collaboration, in this ever growing attack surface security teams must pay attention to ongoing data access at scale. DoControl is committed to helping organizations ensure no unauthorized person has access to company data without slowing down business enablement nor changing the end user’s day to day work.”
DoControl’s white paper is well worth a read, and should be a warning for any company relying on SaaS.
Software company Kaseya, at the heart of the largest ransomware attack in history, says its services have now been fully restored.
Kaseya’s software was the target of a ransomware attack by the REvil group. Because Kaseya’s software is used in managed services around the world, as many as 1,500 customers were believed to have been impacted.
The company has been working hard to restore services, and today announced they have succeeded.
The restoration of services is now complete, with 100% of our SaaS customers live as of 3:30 AM US EDT. Our support teams continue to work with VSA On-Premises customers who have requested assistance with the patch.
We will continue to post updates as new information becomes available.
The attack on Kaseya illustrates the growing cybersecurity issues involved in an ever-connected software industry, where thousands of companies rely on common frameworks, services and applications. Rather than attack each company one-by-one, attacking a common service allowed REvil to cripple far more companies than could be realistically targeted in the same time.
Goldman Sachs has added Microsoft to its “Conviction List,” touting “sustained double-digit” revenue growth.
Microsoft is currently the second-place cloud company, behind AWS. Nonetheless, the company is seen as being in a particularly strong position, thanks to its legacy business and potential to help its clients move to the cloud.
According to Business Insider, Goldman Sachs is now calling for a $315 price target on Microsoft’s stock, a 38% increase over Monday’s close. Goldman highlighted the company’s cloud potential, saying Microsoft is “well-positioned to capitalize on a number of long-term secular trends, including public cloud and SaaS adoption, digital transformation, AI/ML, BI/analytics, and DevOps (amongst others).”
Microsoft has been one of the biggest winners during the pandemic, with a majority of polled companies planning on increasing their Azure and Microsoft SaaS spending. In fact, a higher percentage of respondents planned on increasing their spending on Microsoft, as opposed to those planning on increasing their AWS spending.
Wedbush recently raised their own target from $260 to $270, while acknowledging a bull-case possibility of $300 a share. It appears Goldman Sachs is a even more bullish with their $315 target.
Dell Technologies’ VMware posted its third-quarter results, beating estimates on strong subscription and SaaS growth.
VMware is a leading virtualization software company, with its software in use by many of the biggest organizations in the world. The company’s software is also seeing widespread use in cloud infrastructure, with many telcos relying on it to help speed up 5G deployment.
The company has reported its Q3 results, beating consensus estimates on $2.86 billion in revenue. Subscription, SaaS and license revenue accounted for $1.32 billion, an increase of 10% from the year-ago quarter. The subscription and SaaS revenue alone was $676 million, a 44% increase over the year-ago quarter.
“Q3 was another good quarter for VMware, and we’re pleased with our results,” commented Pat Gelsinger, CEO, VMware. “As customers navigate through these unprecedented times, our focus remains on delivering the digital foundation for an unpredictable world. We continue to shape the future in areas that are top priority for every business–from app development to multi-cloud to security and digital workspaces.”
“Subscription and SaaS revenue increased 44% year-over-year in Q3 and surpassed license revenue for the first time,” said Zane Rowe, executive vice president and CFO, VMware. “VMware will continue to invest in and focus on further expanding our Subscription and SaaS portfolio, which we believe will drive company growth, customer satisfaction and shareholder value.”
AWS has announced Amazon AppFlow, an integration service aimed at helping AWS integrate with various SaaS applications.
Amazon AppFlow was born out of a need to connect with data siloed away in various SaaS applications and services. Previously, in order to integrate that data in AWS, companies would need to write custom code to bring the data together and make it accessible.
Amazon AppFlow addresses these problems by providing a way for individuals of all different technical levels to create bidirectional workflows and data integrations, without the need to write any code. The console allows triggers to be set up to perform actions, all of which can be accomplished in just a few minutes. The end result is a secure method of integrating data.
“Our customers tell us that they love having the ability to store, process, and analyze their data in AWS. They also use a variety of third party SaaS applications, and they tell us that it can be difficult to manage the flow of data between AWS and these applications,” said Kurt Kufeld, Vice President, AWS. “Amazon AppFlow provides an intuitive and easy way for customers to combine data from AWS and SaaS applications without moving it across the public Internet. With Amazon AppFlow, our customers bring together and manage petabytes, even exabytes, of data spread across all of their applications – all without having to develop custom connectors or manage underlying API and network connectivity.”
Amazon AppFlow is likely to be a big hit among companies looking to integrate their SaaS data into AWS.
Cloud backup provider Clumio has announced that it has secured $135 million in Series C funding.
Clumio was founded by serial entrepreneur Poojan Kumar to provide cloud companies with a suite of cloud-based backup tools. The company’s approach is someone unique in that, “unlike legacy backup vendors, Clumio SaaS is born in the cloud,” says Kumar. “This round of investment allows us to push that advantage as we accelerate our development and go to market strategy while continuing to meet customer requirements for backup, regardless of where the data is.”
As an added benefit of the service, customers do not need to install—or even purchase—any specialized hardware or software to take advantage of Clumio SaaS. The service allows a company the ability to rewind and go back to a point before something went wrong, such as a cyberattack or data loss event.
“Similar to Snowflake disrupting the data warehousing market by leveraging the scale, elasticity and economics of the public cloud, Clumio is building a globally consolidated data protection service the right way,” said Mike Speiser, Managing Director, Sutter Hill Ventures. “Harnessing the full power of the public cloud, they are reimagining the backup experience for the enterprise paying particular attention to security, predictable costs and simplicity for their customers.”
The company plans to put the funding to good use, growing its engineering team and expanding its U.S. operations.
“This new funding will help Clumio execute in the following areas:
Accelerate the growth of its engineering team, both at the company’s headquarters in Santa Clara, CA and in its new development center in Bangalore, India
Expand go to market and service operations in the U.S.
Add more support for its 100% channel strategy with additional partner resources and programs and build upon momentum in technology partner programs with AWS, VMware and others
Introduce support for new workloads as Clumio continues to execute against its vision for a globally consolidated data protection service
“Clumio is a secure, backup as a service that consolidates the protection of an enterprise data center and any remote sites with no hardware or software to size, configure, manage – or even buy at all. As enterprises move aggressively to cloud, they can use Clumio to protect workloads like VMware Cloud on AWS and native AWS services. Authentic SaaS protects data regardless of where it resides and delivers critical benefits to the enterprise.”
“Cloud ERP is a very new principle in the market,” says Mark Chalfen, director at PwC. “The way that I see cloud is all round simplification—simple and standard. It’s a lot more easy than it was five, ten, fifteen, twenty years ago.”
Mark Chalfen, director at PwC, talks about how cloud ERP software can help companies drive innovation, standardization and cost savings.
Speed is not a problem. Speed for the organization is the speed to consume the change. The speed is understanding your roadmap, building that roadmap, understanding what the future holds and then planning that back in.
Overcoming Preconceptions About ERP Software
A true ERP, a SaaS ERP, is an asset. There’s a number of clients I will work with and start to talk with and they see it as a liability. We take them on a journey and the realization changes that actually cloud ERP is an asset. The speed, the innovation, the standardization—all the things that people previously thought an ERP was, the ability to write lots of custom code, those benefits are removed when they see the power of the cloud ERP and the future direction of SAP in cloud ERP.
Now, all of our engagements are with the c-suite—a CFO, a CEO—who understands the power of cloud ERP, understands the power of SaaS. That means that the programs we work on are business-led, truly business-led. They understand the benefit that it provides: standardization, simplification, speed and the cost benefit. Now you have standard process. You get some efficiency and you’ll get some cost savings.
There’s three key areas. Break everything off into small consumable chunks. Build that confidence within the business. ‘Look, we deployed within three months. We deployed within six months.’ You then build that confidence. We then need to focus on the change appetite. You need to plan the change engagement. Followed around that, the actual governance and the ownership of the program—you need strong stakeholder management all the way through.
The Tool Is Not the Issue
The tool is there to help you. The tool is mature, the tool is ready, the tool is not the issue. It’s people and data and change. If you can control all of those three, your program will be successful.
“We’re enabling what we call this new era of hospitality,” says Toast CEO Chris Comparato. “We’re investing heavily in R&D. This is a massive opportunity and the restaurant community is a massive market. The market is untapped and we’re in the early days of a major transformation across the entire industry. For us in many ways, we’re still getting started because we’re making massive investments in R&D across the whole spectrum.”
Chris Comparato, CEO of Toast, discusses how the company is continuing to invest in R&D and innovate as they disrupt the hospitality industry in an interview on Bloomberg Technology:
We’re Enabling a New Era of Hospitality
We’re going to do a lot with the money. It’s a nice capital raise ($250 million). We’ve been busy over the course of the past two years really trying to affect a lot of change across the restaurant community. We’re enabling what we call this new era of hospitality. We’re investing heavily in R&D. We look at all of the stakeholders, we look at the guests, we look at the employees, and we look at the owner-manager-operator. This is a massive opportunity and the restaurant community is a massive market. The market is untapped and we’re in the early days of a major transformation across the entire industry. For us in many ways, we’re still getting started because we’re making massive investments in R&D across the whole spectrum.
A good example of what we are doing is how do you get orders into the restaurant? In today’s consumer, personalization, and convenience environment, how does the restaurant get orders? Whether it’s a tool like Toast TakeOut which we piloted in Boston, which allows you to do mobile order ahead with your phone. Or possibly a kiosk or online ordering or a device called Toast Go which we released last year that allows the waitstaff to take orders at the table and turn tables faster. Toast brings (to restaurants) two things. It’s all about more revenue in the door and then operational efficiency.
Toast Growing North of 100 Percent Year-Over-Year
First and foremost we’re happy being private and putting investments to pilots and R&D and really breaking fruit to the future for the restaurant community. I’ve had a lot of friends who have gone public recently and we’re in no rush. I think it’s a milestone. We’re after building long-term shareholder value. When we look at the opportunity for us it’s to build a pillar company in Boston for the restaurant community that builds long-term investor value.
We’re growing north of a hundred percent year-over-year in terms of the customer base (and revenue). We’ve got over 1,500 employees. We’ve probably added a thousand employees in the past couple of years. We have an engineering center in Dublin but we’re still US-based in terms of the restaurants that we serve. We serve restaurants across the United States, whether it’s an enterprise like Jamba Juice or nationally acclaimed restaurant operators like Danny Meyer and Jose Andres. We’re all over the US in 30 markets but it’s still the early days.
Innovating Across the Entire Restaurant Value Chain
We look at the entire restaurant value chain and we’re trying to make their lives better. It’s hard to run a restaurant. This week we announced Toast Payroll and Team Management. A lot of restaurant operators are spending hours doing payroll every Friday. If we can give them their Friday’s back and streamline payroll so that they can get hours back on efficiency to spend more time with guests that’s what we’re doing. We launched that this week which is an exciting new venture for us. We’re going to continue to innovate across the entire restaurant value chain. This includes the back-office, front office, supply chain, whatever it is.
There are areas where we built and there are areas where we partner. I think it’s a space that’s dynamically changing. At the end of the day, we want to help transform the community and move the community forward. The Boston Market (where Toast is headquartered) is tremendous. There is sort of two sides to the market. You’ve got this amazing supply chain of talent with MIT, BU, UMass, and Harvard. There is plenty of talent. Then you’ve got on the other side of the market these companies that are transforming industries like Wayfair, CarGurus, HubSpot, and Toast. It’s an amazing market for us to thrive in and it’s an awesome restaurant community.
We feel like we’re enabling the community to thrive. A lot of the restaurants that are running Toast are adding workforce. Because we’re making their jobs easier they can spend more time with guests, more time cooking, and more time managing the operations. We see a lot of restaurants that are thriving and adding labor and we’re trying to make it easier for them.
We’re Enabling a New Era of Hospitality, Says Toast CEO Chris Comparato
“The applications market is about $125 billion per year,” says Oracle CEO Mark Hurd. “That is spent primarily on applications and most of it today is spent on on-premise applications. That market changes pretty significantly as it moves to cloud. As it moves to cloud, the subscription that you pay for the cloud includes not only the application but includes all of the hardware, the servers, and storage. It becomes a bigger market just by the very nature of the migration of the application to SAAS.”
Recently, Hurd noted that all of their current customers will eventually move to the cloud. “We have a big existing on-premise user base and I believe all of them will move to the cloud,” said Oracle CEO Mark Hurd. “In fact, I was with a large group of our users just last night and they’re all going to move on their time frame. When we get to a certain point you will start to see a geometric move in the market and it will be significant.”
Mark Hurd, CEO of Oracle, discusses their NetSuite acquisition and the growing size of the applications market as it moves to the cloud in an interview on Fox Business. Hurd was in Las Vegas for the Oracle NetSuite SuiteWorld event:
NetSuite Acquisition Has Been an Amazing Success
We’ve invested a lot in the applications market. We’ve invested in big and small segments of the market. Big customers and small customers. We acquired NetSuite about two and a half years ago it’s really been an amazing success. There are roughly 10,000 customers here (in Las Vegas) for our event (Oracle NetSuite SuiteWorld). It is very exciting.
When we bought NetSuite the company was growing about 16 percent in revenue. We’ve invested a lot in R&D and in tailoring the application for more industries. We’ve added sales people as well. It has resulted in incredible growth. Starting about a year ago we began to really grow our booking and that’s now translated to revenue. Last quarter we reported revenue that was almost double the revenue growth we had coming into the acquisition.
Applications Market Changes Significantly As It Moves to Cloud
There is a couple of phenomena going on at the same time. The applications market is about $125 billion per year. That is spent primarily on applications and most of it today is spent on on-premise applications. That market changes pretty significantly as it moves to cloud. As it moves to cloud, the subscription that you pay for the cloud includes not only the application but includes all of the hardware, the servers, and storage. It becomes a bigger market just by the very nature of the migration of the application to SAAS.
Inside that $125 billion about $75 billion is back office. That would be described as things like general ledger, accounting, supply chain, procurement, and HR. The other 30 percent is front office including things like sales automation and marketing automation. NetSuite has played in the mid-market, small customer side of that back office market. It’s had explosive growth. When you ask who’s moving (to the cloud), it’s really everybody from the biggest guys, whether those be as big as an AT&T all the way to your smaller startup.
If you look today, half of the cloud application customers (and revenue) that we have came from our base and half came from outside.
Oracle CEO Mark Hurd – Application Market Changes as it Moves to Cloud
“We have a big existing on-premise user base and I believe all of them will move (to the cloud),” said Oracle CEO Mark Hurd. “In fact, I was with a large group of our users just last night and they’re all going to move on their time frame. We don’t put a time frame on it, but this thing is moving at a pretty good speed. It will not move linearly, it will move geometrically. When we get to a certain point you will start to see a geometric move in the market and it will be significant.”
Mark Hurd, CEO of Oracle, discussed the huge growth in the cloud applications market and he expects Oracle to lead that market in an interview on Bloomberg:
Cloud Applications Will Become a $400 Billion Market
The apps market is about a $125 billion market. It has two pieces to it. First is back office, which is what we call ERP. This is basically your financial systems, procurement, manufacturing, supply chain, and HR. That is really 70 percent of the applications market or around $85 billion. Second is the front office market which includes marketing, sales automation, service, etc. add up to $40 billion. A very interesting phenomenon is that as the on-premise applications market moves into SAAS it actually grows exponentially. Now the applications market is doing all of the server work, all the operating systems, and all the database work. It’s the data center, it’s the people. So the market will actually grow from $125 billion and probably triple just as it moves to SAAS because it’s taking share from the other parts of the IT market. The applications market I predict will actually become more like $400 billion as it goes forward.
We think it is an amazing opportunity. We are growing our applications market over the last 8-12 quarters more than double-digit. The market itself is growing and we are gaining substantive share. We are the leader in ERP. If you go back to Gartner, IDC, and the analysts we are leading in HR now as well. These are very attractive and robust markets. Our customers want to modernize, want to spend less, want someone else doing the work, and they want someone else assuming the risk. We are extremely bullish about our position in the market.
All of Our Customers Will Move to the Cloud
We have rewritten our application base for the cloud, for SAAS. We have been doing this for years and we’ve invested a lot of capital. We are deploying our capabilities all across the globe. We are extremely excited and bullish about not just our current position. There is going to be a leader in this market and there is no one today with more than 50 percent market share. In fact, the highest application percentage of any company in any segment is sort of mid-20s. This generation will see a leader that is much more material than that and I volunteer us to do it. In most segments, the leader has 50 percent plus.
We have a big existing on-premise user base and I believe all of them will move to the cloud. In fact, I was with a large group of our users just last night and they’re all going to move. They are all going to move on their time frame. We don’t actually put an end of life. We have a competitor that does that, but we don’t do that. We want them to move at their pace and we want them to feel good about it. We don’t put a time frame on it, but this thing is moving at a pretty good speed. It will not move linearly, it will move geometrically. When we get to a certain point you will start to see a geometric move in the market and it will be significant.
SAP CEO Bill McDermott says that buying Qualtrics creates a “global growth juggernaut in the cloud, the number one business software growing in the cloud in the world.” McDermott says that he’s here to build a company for the generations, not just for a few days and that this is a fundamentally transformational deal, one that will reshape the entire industry.
Qualtrics CEO Ryan Smith says that combining forces with SAP will change the experience economy forever. “This is by far a once in a generational opportunity and it’s going to change how everyone thinks about cloud and SAAS and CRM and ERP and HCM forever,” said Smith. “Why wouldn’t we want to be a part of that?”
SAP CEO: If You Can Combine X-Data and O-Data You Can Change the World
We’re reshaping the enterprise application software industry. What led us to this deal is that all CEOs you talk to want to run their companies on an end-to-end basis. They want to deal with their customers in every channel, they want to fulfill, and that requires operational data. SAP touches 77 percent of the world’s transactions, but the operational data doesn’t ask the right question. It doesn’t say, why does the customer feel a certain way about your brand, about your products, and about their experience. This new category called experience management is all about x-data and if you can combine o-data and x-data you can change the world.
Ryan I have known each other about three months. We spent a lot of time together, a lot of text, a lot of phone calls, and we fundamentally wanted a transformational deal, one that would reshape the entire industry and here we are.
SAP CEO: If You Want to Survey Somebody You Hire Survey Monkey…
Have you looked at acquiring SurveyMonkey? No, they do surveys we reinvent customer experiences in a whole new category called experience management. If you want to survey somebody you hire Survey Monkey, if you want to fundamentally change the way an enterprise thinks about its culture, its brand, its products, and its people, now you’re talking Qualtrics, the leader in the marketplace by a factor of 10x. We’ve always bought the biggest and the best one and thankfully with the high trust that Ryan and I developed and our companies developed we’re ready to go.
SAP CEO: A Global Growth Juggernaut in the Cloud
When you’re talking about this particular company, Qualtrics, they’re growing at 40 percent on a year-over-year basis in the cloud. They have a very serious go-to-market strategy, but it’s modest in size. We’re growing at 41 percent year-over-year in the cloud and we have a very large go-to-market machine, more than 15,000 people touching the customer every day. If you combine that rate of growth you have a global growth juggernaut in the cloud, the number one business software growing in the cloud in the world. So digest that dear shareholders.
We’re saying and we’re very clear on this, we’re going to grow total revenue in double-digit, operating income in double-digit, not to mention being the fastest growing cloud company in the world. So today this will be digested. Now they’ll know, why did he do a big one when he said he was more likely gonna do tuck-ins? Because I never thought I would get Qualtrics and it takes some skill to pull deals like this off and convince a great entrepreneur like Ryan that he’s better off with SAP than going it alone when he’s 13x oversubscribed in his IPO.
SAP CEO: I’m Here to Build a Company for the Generations
So that’s what took a little bit of time and when we pulled it off together this weekend we were literally crossing each other in the air at 39,000 feet, so this was high-stakes. Now that we’re here, we’re doing all-hands meetings, we’re talking to the media, we’re talking to the bankers, and I expect the stock to do extremely well as the day progresses, and more importantly in the mid and the long term. I’m here to build a company for the generations, not just for a few days.
Qualtrics CEO: We Created the Experience Management Category
We were planning on ringing the bell on Thursday. I was home this weekend just to kind of take a little break after a week on the road it was going really well. We were 13 times oversubscribed with the best still ahead of us and then we had an opportunity to combine forces with SAP and change the experience economy forever. I think in my conversations with Bill it’s something that we only dreamed of that we could make this happen. It’s pretty special.
We’ve been doing this for 16 years. We transformed the entire experience management category, we’ve created it. We’re powering the feedback for 14 different airlines, 200 financial institutions, and we’ve really created this category to go do something big, that was the goal. We never had a financial reason to go public, we bootstrapped our company longer than anyone and we had no investor pressure. We’re one of the only companies that has been cashflow positive and high growth since its inception. The reason why we were going public was to create this massive new category.
Qualtrics CEO: A Once in a Generational Opportunity
When Bill approached us with a once in a generational opportunity that we could take all the power of Qualtrics and our 9,000 brands and have that sit alongside SAP and have every ounce of customer feedback go into the entire product process with an ERP system, reshape how the world thinks about CRM, and everything that we’re doing to power all the employee experience of the whole world that’s all available overnight. That’s something that we couldn’t turn down and we chose to be here.
Our IPO was already way oversubscribed, it was gonna take off and everyone was looking at us saying, hey this is the next $20 or $30 billion dollar standalone company. But we want to win and this is what winning looks like and we’re going to reshape the entire industry and Bill’s on board and we’re excited.
We were pretty set on going public and so it wasn’t till this opportunity came through this weekend where we said, hey look, this is by far a once in a generational opportunity and it’s going to change how everyone thinks about cloud and SAAS and CRM and ERP and HCM forever. Why wouldn’t we want to be a part of that? We couldn’t be more excited and like I said this is a pretty special team with Bill and me.
SAP CEO Bill McDermott, in a wide-ranging interview with Bloomberg talked about enterprises moving to the cloud, competing with Oracle’s new autonomous database, competing with Salesforce, and its huge business in China:
SAP Has Taken Over the Enterprise Database Market
Do you have a major move to the cloud? If legacy companies haven’t fully invested themselves in the cloud where they’ve converted their revenue streams more to cloud than on-premise I think you will see them make bold moves to get cloud-ready. No choice, that’s where the customer wants us.
We obviously have taken over the enterprise database market with HANA. HANA has many of the characteristics that you mentioned (referencing Oracle). HANA can take data from any source, everything that is either structured or unstructured and data from any source in the enterprise. HANA is running the biggest enterprises in the world now with 25,000 customers at mass scale. We like our HANA database very much.
It’s All About the Customer Experience
We see a fourth-generation of CRM where we go beyond the current market participants. Basically, they focus on sales, marketing campaigns, things that essentially take money out of the customers pocket. What we want to do is focus on an omnichannel ecommerce world where we connect the demand chain because our customers are social, mobile and on the run. They shop in every channel, direct to consumer, wholesale, retail. We want to connect that demand chain to the supply chain so that we have a complete end-to-end business.
Why is this so important? We are not just talking about CRM, we are talking about customer experience. The way CEOs think about their brand, their products, their human capital, their customers. All of the people inside of the company have to be completely committed to the customers outside the company. This is what we call fourth-generation CRM. It’s all about the customer experience.
We’d Like to See China and the US Cooperate
The most important thing is that we get paid to run businesses and work in an environment where we let government do what government does. All government leaders have to do what’s best for their country and best for their constituents. These tariffs are obviously a serious situation. You have the two largest economies in the world with $30 trillion in combined economic firepower that right now are at a little bit at odds with each other.
It’s good, as we saw in today’s tweet, it was stated that at the G20 President Xi and President Trump will sit down and talk. That’s very encouraging to the market. Markets like certainty. So certainly we would like to see China and the US cooperate. It’s good for supply chain, it’s good for business.
China is Regarded as SAP’s Second Home
Germain engineering is highly regarding in China, as it is in the United States and around the world, but we do particularly well in China. China is our fastest growing market. We think that China is easily regarded as SAP’s second home in terms of market receptivity, ecosystem growth in China, and our long-term prospects. We think China will end up being the biggest market in the world soon.
We have the most sophisticated data privacy in the world. We acquired a company called Gigya where we have billions and billions of customer records. We protect your privacy, we don’t let customers actually engage you unless you agree that you want to opt-in on various offerings from our customers and they serve their customers. We follow the same reference architecture, the same high-security standards and cloud standards in China that we do in Europe, the United States, and every other theater in the world.
We are very confident in China in the way enterprises can serve their customers in China with high-security standards. We recently announced a very important partnership with Alibaba and that is a cloud partnership that will not only impact our growth in one of the fastest growing regions in the world.
We Are Very Diverse and Highly Inclusive
We actually have appointed in the last 12 months two women to our Executive Board, not just because they are women, but because they are great leaders. That would be Adaire Fox-Martin and Jennifer Morgan. If you look at our company we have a third of our workforce that is female and we also have a third of our leaders that are female.
We are very diverse and highly inclusive. One of the things we really enjoy is what we have done with Autism at Work and now we have dedicated one percent of our hiring to autistic folks, at least on the spectrum somewhere, to help our workforce be highly productive and diverse. That extends also to the solutions that we have. If you look at success factors, the number one human capital solution in the world, we have a business without bias mentality.
Computers don’t have bias. In the way we build the algorithms in the software they eliminate bias from the hiring process. The computer doesn’t have a bias. It looks for the best candidates and it fills an algorithm or model that the company is trying to get at. If you want 40 percent of your workforce to be diverse and inclusive, the model is built to do that for you. You don’t leave it up to humans, you let the software do the work and then the human judgment comes in at the final phase of hiring. It’s changing companies everywhere.
In 2010, Freshworks started as Freshdesk with a dream to make a dent in the world of customer support. The company has grown exponentially since then, moving well beyond customer service offering products that compete directly with Salesforce and others…
By necessity, from their humble beginnings in Chennai, India eight years ago, Freshworks brought an innovative sales and marketing approach which enabled them to compete globally immediately.
Freshworks CEO Girish Mathrubootham recently discussed in an interview on ZDNet how Freshworks disrupted the global SMB business model:
What We Really Have is a Business Model Disruption
What’s different with our approach is that you have to really understand the US model or the Silicon Valley model of scaling a SAAS business. It’s not suited to serve the long tail of the global SMB. The model is dependent on going upmarket and selling to the enterprise because when you actually have salespeople and the territories are shrinking and you want to grow in revenues you really want to go upmarket and close those million dollar deals or 350k deals.
What we really have is a business model disruption where we are able to serve the long tail of the global SMB profitably. To understand this you have to probably look at the only other company that I can think of is Atlassian, which also started off outside the valley. When that Atlassian IPO happened I’m sure you also saw along with the rest of Wall Street in Silicon Valley on how different the economics of the model was.
The Flywheel Effect
Even though Atlassian didn’t have a lot of SMB customers, their highest price point was $8,000. Even Walmart paid them their $8,000 one-time fee. I think what Atlassian shows you is a glimpse of a different model where you call it the flywheel effect, where a lot of teams just buy the software off the web and then you grow through land and expand inside these companies. That is the closest model that I can tell you.
Because we started in Chennai, India about eight years ago, we did not have any customers in Chennai and we didn’t have many customers in India for that matter, so we were actually from day one we had to go global. Our first customer came from Australia. When we had six customers we had them from four different continents. When we had 70 customers the average that a customer was paying us was $30 a month. The average revenue per customer was $30 a month in 2011.
Fundamentally a Different Business Model
We were really starting from the SMB, then we started building more products, expanding our product plans, expanding our portfolio, offering customers more features to get them to upgrade, or add more agents or try other products. I think what we had is fundamentally a different business model of acquiring customers online and selling profitably to the long tail of the global SMB.
What helped us was like the tailwind that we rode, in hindsight, I can tell you were all the SMBs actually going through this digital transformation. SMBs did not have the budget 13 years ago to go spend a hundred thousand dollars for on-premise software. Today, they can put on their credit card $100 or $200 a month and actually buy software. We were probably at the right place and at the right time in terms of bringing that software to them and being able to sell to them globally from Chennai.
A lot of transactions and payment services are now being done online—from subscribing to streaming services like Netflix, to ordering food or buying clothes. This has led to a need for tools that will let companies, particularly small businesses, get paid.
Stripe is stepping up to meet these demands with Stripe Billing. Thissubscription-billing service was developed to help both starting and established businesses get paid on time and without any problems.
The company is known for supplying developers with the means to charge customers and conduct transactions in a simpler way. But now they’re taking it further by rolling out a billing product geared for online businesses.
Stripe Billing reportedly uses machine-learning technology to help curb late or missed customer payments. The system can handle tasks like invoicing and subscription recurring revenue. It’s easier and faster to use than other payment systems. What’s more, it uses predictive technology that pinpoints the optimal time to retry collecting on a missed payment with the goal of reaching the client.
Stripe has also coordinated with major credit-card providers like American Express, Discover, Mastercard, and Visa to allow customers to receive their updated or new credit card numbers without having them re-enter their personal information.
Stripe Billing also supports ACH payments and wire transfers, a feature that will undoubtedly help corporations and companies with larger accounts.
Tara Seshan, PM on Stripe’s billing product, explained that even large companies with enough resources to develop in-house billing would lament on how challenging the process is. This prompted them take a step back and think about how to devisebilling tools that are accessible to everybody.
“That meant something really flexible and really easy to implement,” Seshan said. She also added that even if you’re a small business, you should have “the same subscription tools as Spotify.” Stripe Billing can be considered the “building blocks” that a company can use to have a fast and flexible payment service.
The Thinkfuse team commented about the acquisition on their blog today:
“Today, we are excited to share that the Thinkfuse team will be joining salesforce.com, where we’ll advance our mission to promote open communication and transparency in the workplace.”
“To all of our users, thank you for using Thinkfuse! We’ve been on an incredible journey thanks to your comments, feedback, and support. We started Thinkfuse with a simple idea to help teams communicate more effectively. We now have an amazing opportunity to pursue that passion on a much larger scale at salesforce.com – one of the leading companies in the space.”
Oracle’s new public cloud features their fusion applications delivered as both software as a service (SaaS) and platform as a service (PaaS). On top of their new social network, they will also offer database and Java services.
A considerable edge which Oracle has over their competition is top-notch security. One of their first customers was the Central Intelligence Agency, and that experience has been at the forefront of all Oracle’s endeavors ever since.
Oracle CEO, Larry Ellison comments:
“We have very comprehensive, fine-grained security in our system,”
“Your database is not commingled with other customers’ data,”
“It’s a big difference between our cloud and others on the market.”
“Modern virtual technology is how we offer safety.”
Check out Ellison’s first tweet from the Oracle Social Network:
Actually it is a monumental achievement for Oracle who took a lot of flak for moving all their applications from on-premise to the cloud many years back. They have invested heavily over the past half decade and it has really paid off for them. Cloud computing is the next big thing and they were on of the first to get there.
Ellison again comments:
“We think a modern cloud lets you decide when you want to upgrade, not have the cloud vendor tell you when you have to upgrade,”
“We think that’s a very big deal. We’ll allow you, within reason, to decide when to upgrade.”
And it seems that Oracle is still investing heavily in the future. Earlier this week we reported on the company’s intention to acquire Collective Intellect, a cloud-based social monitor and analytics firm. The addition of Collective Intellect to Oracle’s already broad base of client services will allow their customers to understand and anticipate consumer’s actions on a much fuller spectrum.
Late last month, Oracle also revealed their plan to acquire Virtue Social Marketing Platform. Among other things, Virtue allows clients to manage social media campaigns across Twitter, Facebook, Google+, and YouTube. This investment alone cost Oracle over $300 million.
So it’s clear Oracle has no plans to stop and this newest public cloud is their shining masterpiece and, most likely, the foundation for all their future innovations and refinements. They don’t seem to worried about the competition, it sounds like they are ahead of the pack on this one.
By necessity, from their humble beginnings in 
