tag:blogger.com,1999:blog-305398992024-03-13T17:53:12.557-07:00Dani's Perspective on SaaSSoftware-as-Service as a disruptive trend and how it affects the traditional, ISVs and IT moving to the Cloud.
Considerations in the transition to the new model and expertise on SaaS Service Operations - STORM™ and DevOps
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Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.comBlogger58125tag:blogger.com,1999:blog-30539899.post-35604132013156073262014-08-28T00:12:00.000-07:002014-08-28T00:12:25.663-07:00SaaS Incident Management Best Practices - Epilogue (The STORM™ Series)“If you want a happy ending, that depends, of course, on where you stop your story.” (Orson Welles)<br />
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This is the final post, covering Incident Management in a SaaS Operational Environment.</div>
<br />
The <a href="http://saasperspective.blogspot.co.il/2014/08/saas-incident-management-best-practices_13.html" target="_blank">previous posts</a> discussed the <i>Prologue, Act I </i>and <i>Act II </i>which covered the preparations and how to react and then how to act in an incident.<br />
<br />
As much as one would like to sit back and sip a cool Coke/beer once the incident is over and service is restored, ”it ain’t over till I’s over”. There is much work to be done to get closure.<br />
<br />
<b>Notify- Update concerned parties of service restoration</b><br />
<b><br /></b>
All parties - internal, partners and customers - should be notified that the incident is over.<br />
The first action is to post an all-clear message on the Service Status Page.<br />
Use the same mailing lists (internal and external) that were used to notify of the incident, to spread the good word that service is restored.<br />
<br />
Update <b><i>“Top 10”</i></b> customers. The concept of the <i>Top 10</i> is used in other STORM™ practices and is used metaphorically, since the list may contain only seven or twenty seven customers. This is a small group of key functionaries at a select collection of customers with whom the company has developed special relations. These customers tend to be the larger ones or the most profitable ones, or strategic in one way or another. These key players should be handled with Tender Loving Care. Following some incidents, the executives of the SaaS provider would be making the calls if the problem was severe enough and the customer is important enough. The <i>Top 10</i> must be updated ASAP, so that they won’t hear from other sources of the issues and the resolution. There is a good chance that if the incident was prolonged, some members of the <i>Top 10</i> were already contacted at the early stages, in the Notify phase.<br />
<br />
<b>Record Incident </b><br />
<b><br /></b>
Recording the incident has a number of goals/benefits.<br />
<br />
<ol>
<li>Allows the company to manage the SLAs in order to determine who was affected and for how long</li>
<li>An important KPI – allows the company to measure progress across time</li>
<li>Used in the Review and simplifies the creation of the RFO (below)</li>
<li>Enables the company to improve across processes, components and Incident Management in the future.</li>
<li>An important datum of OI – Operations Intelligence - to be used in analytics, prediction and cost cutting.</li>
</ol>
<br />
Each incident must be documented with as much detail as possible and should include the following:<br />
<br />
<ul>
<li>Events leading to outage </li>
<li>Time-line of events and actions</li>
<li>Components that were affected </li>
<li>Customers, or customer groups that were affected </li>
<li>Resolution - what was done to resolve the problem (may include technical data such as commands that were run) </li>
<li>Indication of full/partial/no outage </li>
</ul>
<br />
NOTE Any changes to components in the system must be reported to the Asset Management Database and Change Management tables<br />
<br />
<b>Review - Post Mortem</b><br />
<br />
The value of the incident review cannot be overestimated. The staff attending the Post Mortem should include anyone that was involved in the incident, or at least a representative from that function. E.g. if multiple CSRs were involved, or multiple Ops engineers, it will suffice if one member of those groups attends, but that person needs to collect all the relevant information from that group’s perspective.<br />
The review should take place as soon as the relevant information at most two days following the incident.<br />
A successful Post Mortem should result in:<br />
<br />
<ul>
<li>A clear view of the events, activity and timeline </li>
<li>Understanding the root cause</li>
<li>Understanding the damages</li>
<li>Analyzing what worked out and what did not during the incident</li>
<li>Verifying that Known Problems and Workarounds are updated on the Knowledge Base</li>
<li>Verifying that all notifications and customer facing activity has been performed</li>
<li>Remediation steps</li>
<li>Lessons learned and what should be done differently next time</li>
<li>Agreement on the messaging and/or distribution of the RFO (below)</li>
</ul>
<br />
<br />
<b>RFO – Reason for Outage</b><br />
<b><br /></b>
The final step in the closure is filling out and sending the RFO, using a pre-defined template.<br />
The RFO is a document, expected by the customers describing the Incident, the cause and what was done to minimize future re-occurrences.<br />
Sending out the RFO should be done with careful thought. First, the wording and messaging is important. One needs to be as transparent as possible without seeming like complete fools. Also, if only a portion of the customers were affected, perhaps is it wise not to advertise the service degradation to those who had no idea that anything was amiss. This decision is left to company policy or decided per incident at the Post Mortem.<br />
<br />
The RFO should include these fields:<br />
<br />
<ul>
<li>Meaningful title</li>
<li>Date of Outage</li>
<li>Time and duration</li>
<li>Incident description</li>
<li>Affected services</li>
<li>Root cause</li>
<li>Resolution</li>
<li>Next steps</li>
</ul>
<br />
This is the fourth and last article of the Incident Management. The book, when published, will contain more details and useful templates.<br />
<br />
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<b><u>May the STORM™ be with you.</u></b></div>
<b><u><br /></u></b>
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<b><u><br /></u></b>
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Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-82612031448858994742014-08-13T08:53:00.000-07:002014-08-30T06:48:48.487-07:00SaaS Incident Management Best Practices - Act II (The STORM™ Series)“A thought which does not result in an action is nothing much, and an action which does not proceed from a thought is nothing at all” (Georges Bernanos)<br />
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<br />
This post is the third, covering Incident Management in a SaaS Operational Environment.<br />
(This post first appeared earlier this week on <a href="http://saasaddict.walkme.com/" target="_blank">SaaS Addict</a>)<br />
<br />
The <a href="http://saasperspective.blogspot.co.il/2014/08/saas-incident-management-best-practices.html" target="_blank">previous post</a> covering the initial activities of the incident, discusses the more reactive tasks, namely Detection, Recording and Classification. This post will discuss the proactive stages leading to resolution.<br />
<br />
<b>Notification </b>– Inform everybody of the incident.<br />
<br />
There are three groups that must be made aware of the incident as soon as it is classified:<br />
<br />
<ul>
<li>Internal staff. A predefined list of who gets notified within the company must exist. Whether it is done via email, chat, whatsapp, phone call or carrier pigeon should be determined (ahead of time) according to the classification (urgency and impact). You do NOT want a situation where a major customer informs the sales rep of a problem.</li>
<li>Customers. Sometimes the classification of the problem would determine that there are no impacted customers right now and that service could be restored shortly. In this case there is no advantage of creating mass hysteria. The Status-Page (as described in the first post) should be updated first. Now, depending on a many circumstances there are options of sending out an email to all customers, affected customers, highly valued customers, etc. Under a certain set of rules, account managers may call their customers to inform them personally. If the application (is not down and) has a notification box, this a good opportunity to inform actual users of problems.</li>
<li>Partners / Channels. Don’t forget your partners. Sometimes in the heat of an incident they are not notified. It may affect them and their customers.</li>
</ul>
The points I am trying to nail are:<br />
<ol>
<li>Do not risk having customers discover on their own that there are problems – if they are likely to find out, make sure you are the one informing them.</li>
<li>Try to determine all this activity prior to the incident, not while you’re in the middle of it.</li>
</ol>
<br />
<b><u>Note</u>: Status Page</b><br />
This is part of the Notification process, but it merits its own section.<br />
The first Status Page I implemented was at a SaaS provider whose service was business critical. Before we implemented it, each event, real or imaginary, would generate hundreds of calls to the support center. The lines would clog up and the customers would leave angry or frustrated messages. They would try again later and still get the ‘please leave your message’. After the event was over the exhausted CSRs would have to open a helpdesk ticket for every recorded message, and call back the users. This was not only wasted effort and time consuming, but we ended up with many frustrated customers.<br />
<br />
Once the Status Page was implemented, it took a few weeks to get the customers used to checking it out and the amounts of calls we got during an incident was reduced by two orders of magnitude!<br />
Keep in mind that the Status page should be updated regularly, with a timestamp attached. Any information that can be provided to the customers will boost their confidence and give them a sense of how soon the problem would get resolved.<br />
<br />
<b>Escalate </b>- Get the relevant people working on the problem ASAP<br />
<br />
Having planned the Escalation Path in advance, as recommended in the previous post, this should be a straightforward process. Some issues may be resolved by a level-1 operator, but assume that in major incidents everybody will be involved. It is important to stick with the escalation path not to hinder the Investigation process.<br />
<br />
It is imperative that an <u>Incident Manager</u> be assigned to the particular event. It may be decided in advance or ad-hoc. The IM gathers the relevant staff in the War Room (below) and manages the whole process, assigns tasks, collects information and ensures that the whole process is recorded.<br />
<br />
<b>Investigate </b>- Determine the root cause<br />
<br />
As this point we should have the following:<br />
<br />
<ul>
<li>An assigned Incident Manager </li>
<li>People of relevance gathered together in the ’War Room’, whether physical or virtual</li>
<li>Understanding of the problem – what is not functioning</li>
<li>Understanding of the impact – who is suffering from it and how urgent is it</li>
<li>Understanding of the affected component – sometimes it is obvious from the onset that a major component is down, via monitoring or a report from a service provider, but in complex systems this is not always possible. Sometimes a problem in one sub-system will manifest itself as a problem in another dependent sub-system. The Known Problems in the knowledgebase should be very helpful.</li>
<li>Using the Component-Customer mapping as described in the previous post, could be helpful to determine to culprit. </li>
<li>Assuming you have been following the practices of the STORM™ Change Management, you would have at your fingertips a query of all changes to the system that were done in the last X hours. There is a very high correlation between changes and failure, so that it safe to assume that the problem will become obvious. Keep in mind that changes should include everything in your production domain including your service providers and your customers.</li>
<li>Usage of the Knowledgebase, as described in the previous post might point out to similar cases that were encountered in the past. </li>
</ul>
<br />
<b><u>Note</u>: War Room</b><br />
As described in the Prologue, a quiet environment, where only people who might contribute to the process, is vital. The war room, should include up-to-date information on all aspects, and allow open communication between all parties. There should be a single entity, the Incident Manager, running the show, gathering information and assigning tasks to the various participants.<br />
It is important to keep out of the room any person who might add unnecessary pressure and the IM should feel confident enough to kick the CEO out of the room if it is deemed necessary.<br />
Remember that a customer support representative is present as well. The CSRs’ job is to report on any new developments from the customers’ point of view and to communicate to the customer base any progress, preferably through the Status Page.<br />
<br />
<b>Restore Service</b> - Allow your customers to continue working<br />
<br />
While still in the War Room, the process of restoring the service is done. There are usually three options:<br />
<ol>
<li><u>Resolving the problem</u>. Sometimes the issue is straight forward and can be resolved with firing up a backup server, restarting an Windows' service, switching to the last reliable version , or even relaunching the application. If there is a high probability that taking such action could bring the service back within minutes (this is open to interpretation), that is obviously the preferable route. A knowledgebase of Known Solutions would be a great asset at this point. Predefined scripts, as part of the KB, would be even better.</li>
<li><u>Workaround</u>. When the problem is not well understood and there is no guarantee that any remedial action will bring the service up, or even if it does, there is no guarantee that the problem will not reoccur within a short time, there should be a workaround solution. Such a solution might be a temporary one (such as reverting to the last working version, or database) and may include reduced functionality, but it will at least allow the customers to get back to work, until resolving the problem.</li>
<li><u>Failover</u>. Assuming redundancy across production systems (locations?) or a DR site is available, there is always the option of failing over to the backup service. This is not an easy decision and not without its costs, but if a workaround is not available and resolving the problem at the production site is going to take long, restoring service to your customers is paramount. </li>
</ol>
<br />
Throughout the whole process the Status Page should be updated, and obviously, when service has been restored to a satisfactory level, that should be communicated. It is up to the Indecent Manager to verify that this is being dome and up to the CSR to perform that. The Incident Manager should not be assigned with tasks herself, and her only responsibility is to make sure that everything is being documented and calmly coordinate the activity in the War Room.<br />
<br />
In <a href="http://saasperspective.blogspot.co.il/2014/08/saas-incident-management-best-practices_28.html">the next post – the Epilogue</a> – we will look at the events and activities that take place after the service was restored. Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-2159699461684153792014-08-07T01:43:00.000-07:002014-08-30T06:48:06.800-07:00SaaS Incident Management Best Practices - Act I (The STORM™ Series)"It is not stress that kills us; it is our reaction to it" (Hans Selye)<br />
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This is the second posting of the Incident Management Best Practices.<a href="http://saasperspective.blogspot.co.il/2014/07/saas-incident-management-best-practices.html" target="_blank"> The first part</a> covered the Prologue - the preparations that will improve your survival rate for the next incident that is just waiting to happen.<br />
(This post first appeared on <a href="http://saasaddict.walkme.com/" target="_blank">SaaS Addict</a> earlier this week)<br />
The main story contains two acts. This, the first one, deals with the <i>reactive </i>part of the incident. The next post, Act II, will deal with the <i>proactive </i>part of managing an incident.<br />
<br />
<b>How Soon?</b><br />
⦁ How soon did you find out there was a problem?<br />
⦁ How soon did you inform your customers?<br />
⦁ How soon did you know the extent of the problem?<br />
⦁ How soon did you know the impact?<br />
⦁ How soon did you start handling the incident?<br />
⦁ How soon did you get a workaround functioning?<br />
⦁ How soon did you resolve it? <br />
⦁ How soon were you customers informed about the resolution and causes?<br />
<br />
Incident management is all about minimizing the damage, doing so in the shortest time possible and taking steps to improve the service going forward.<br />
If you followed the practices recommended in the previous post, you will be much better prepared to deal with whatever hits you, be it as small as a weekly report not being produced or as bad as a full crash of the system.<br />
<br />
<b>ITIL Incident Management</b><br />
This post does not aim to replace an ITIL certification course (STORM™ was inspired by ITIL and many of the terms are borrowed from ITIL/ITSM), but it follows, to an extent, the activities as they appear in much of the ITSM literature.<br />
The idea behind this approach is to keep a leveled head, to ensure that all details are captured and to recover ASAP. <br />
<br />
The stages are:<br />
<ul>
<li>Detect </li>
<li>Record</li>
<li>Classify</li>
<li>Notify </li>
<li>Escalate</li>
<li>Investigate </li>
<li>Restore</li>
</ul>
<br />
<b>Detection</b> - Initiation of the process<br />
When an incident is detected in the organization, it could originate from a monitoring system that alerts the staff just as it happens. In the best case scenario, the problem could be resolved before most customers are even aware of a problem. Alas, the incidents we are discussing usually don’t have this “lived happily ever after” ending.<br />
<br />
In reality, many of the really <i>bad </i>problems are those you <u>did not anticipate</u>, and you are made aware of them by a customer calling in, or perhaps a member of the staff noticing something wrong while doing routine work or demoing the product.Often your monitoring system will alert you on an issue that is derived from the real problem, without detecting the problem itself. These cases are misleading and will result in a longer time to resolution.<br />
<br />
Regardless of how the issue was detected, the process must begin at the same single starting point - the helpdesk or its equivalent in the company. It may be a dispatcher, or the support person who is on call at home.<br />
<br />
<b>Recording </b>- Keeping track of events<b><br /></b><br />
When a nasty problem arises, it may be very low on your priority list to do clerical work, so one may be tempted to postpone this activity to a later stage.<br />
It will become crucial later to have that information and therefore it is important that you pause for a minute and record the information. You might scribble it on a piece of paper to be later entered into the system or entered directly, but capture the following:<br />
<ul>
<li>Date and time of incident first recorded </li>
<li>Means of detection (customer call, internal monitoring alert, external monitoring, vendor call, internal staff, etc.) </li>
<li>Manifestation – how did the problem appear at first </li>
</ul>
Recording should continue throughout the incident. The Status Page allows capturing some of the information.<br />
<br />
<b>Classification</b> – Determine the impact on customers / components and the urgency. <br />
When the single datacenter is down, it will be rather simple to determine impact and urgency, but many a time, only some customers are affected, or only some functionality is missing.<br />
<br />
It is highly important to determine the impact of the incident to allow a proper reaction. Say, you have an affected production system in the UK and your product is mainly a 9-to-5 solution, and it is evening in Europe. The urgency will not be as high as if your East Coast production was down and it is 11:00AM EST right now.<br />
Perhaps the synchronized reporting database is not accessible. It is not as bad as if the transaction database was out of commission, basically shutting down your operation. <br />
The classification will determine many factors in how you manage the incident and therefore it is paramount that you don’t get it wrong.<br />
Remember the ‘customer/component mapping’ from the Prologue posting? This is a good time to utilize it to determine affected component or customers.<br />
<br />
The<a href="http://saasperspective.blogspot.co.il/2014/08/saas-incident-management-best-practices_13.html"> next post, ACT II</a>, will deal with the more proactive aspects, namely Notification, Escalation, Investigation and RestorationDani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-39573426011852100512014-07-19T08:28:00.003-07:002014-08-30T06:47:00.787-07:00SaaS Incident Management Best Practices (The STORM™ Series)"Remember that failure is an event, not a person" (Zig Ziglar)<br />
<br />
(this post was first published on July 14, in <a href="http://saasaddict.walkme.com/" target="_blank">SaaS Addict</a>) <br />
<br />
<b>Shift Happens</b><br />
No matter how much you prepare, the amount of resources you pour into your operation and the experts you hire, something will break in your production system eventually. (This is not a new subject - see <a href="http://saasperspective.blogspot.co.il/2011/12/black-swan-event-in-saas-operations.html" target="_blank">the Black Swan Event in SaaS Ops</a> and <a href="http://saasperspective.blogspot.co.il/2014/02/storm-for-dummies.html" target="_blank">STORM™ for Dummies</a>)<br />
<br />
Incidents could manifest themselves as slow response time, loss of a function (e.g. email not being sent, Backup data not FTPed to client), a whole module malfunctioning or a full scale downtime for some or all of your customers.<br />
I have witnessed too many service disasters in my professional career and I have the battle scars to show for it. On the bright side, the STORM™ methodology grew out of the smoldering ruins.<br />
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<br />
Following is a three piece article discussing how to prepare for, manage and survive your next incident (and it is out there, lurking in the dark right now, rubbing its palms together, waiting to strike).<br />
As in any good apocalyptic novel, this article is divided into the Prologue, the Main Story and the Epilogue. The first article will cover Act I – Before the world came to an end. <br />
<br />
<b><b>Prologue - </b>ACT I </b><br />
<u>Plan for failure</u>. Expect things to break. With that in mind you should try to anticipate what might break first.<br />
Keep in mind however, that as much as you plan, there is a good chance of something else coming out of a dark corner and biting you in the behind, since you don’t know what you don’t know. Still, for all the other things that you could anticipate this is a good plan.<br />
<br />
<b>SPOF Analysis</b><br />
<i>Single Point Of Failure</i> Analysis is an exercise that should be practiced once a quarter. Without going into too many details the following outlines the principles: <br />
<ul>
<li>Map all your IT assets (and by ALL I mean not just the important stuff like databases and web servers, but also the phone connections to corporate HQ)</li>
<li>Perform on each item an Impact Analysis – What would be the Effect of Failure of that component on the service levels</li>
<li>Assess the Risk of losing each component. What factors might lead to failure</li>
<li>Mitigate the problem by taking pro active measures; e.g. invest in a better storage solution or duplicate the component and load balance between the two.</li>
</ul>
<br />
<b>Monitoring & Alerting</b><br />
These practices are<b> </b>explored in detail in the STORM™ Event Management chapters. Suffice to say that:<br />
<ul>
<li>Monitoring allows you to detect the problem so that you can fix it </li>
<li>Detecting a problematic component allows you to react early on (before your customer calls in, pissed off) </li>
<li>Therefore, monitor EVERYTHING – components, processes, communications, workflows, response time, etc.</li>
</ul>
<br />
<b>Escalation Path and Hunt Group</b><br />
<ul>
<li>Define who gets alerted under what circumstances. E.g. if there is a slowdown on response time for the database, the first person that should be alerted might be the DBA. Map out the various scenarios, who is has ownership and if the event merits escalation. </li>
<li>Define the escalation path while you are calmly sipping tea before an event occurs, so those decisions are not made under duress.</li>
<li>Define the Hunt Group, policy and call sequence. Most PBXs and telephony services provide this feature. <a href="http://en.wikipedia.org/wiki/Line_hunting" target="_blank">This link for more info</a>.</li>
</ul>
<br />
<b>Document Changes</b><br />
As part of the STORM™ Change Management practice, all changes to production should be documented and easily accessible, so that one can query changes immediately in case an incident occurs. (Across location, function, affected customers, Etc.). Remember that<u> some change</u>, somewhere in your production universe will <u>always</u> be the cause of an incident. It may be as obvious as installing a new Web server or as obscure as new browser version on one of your customer’s laptops.<br />
<br />
<b>Customer-Asset Mapping</b> <br />
Create a relationship chart of which assets (or group of assets) can be mapped to a customer (or group of customers). An asset may be the AsiaPac data center in Melbourne or a config file on one of the VMs in AWS.<br />
<b></b>When the time comes, this will be very handy in both locating the problem and assessing the impact of service degradation. Therefore, saving this relationship in a DB table will prove valuable.<br />
<br />
<b>NOC</b><br />
As part of the STORM™ Event Management practice, a Network Operations Center is always a great advantage. NOCs can be as elaborate as the NASA Mission Control Center, or a loosely coupled web-based dashboard, that presents monitoring data from various sources. A 24X7 manned NOC with 20 giant flat screens usually takes time and continuous investment to reach, but even a small SaaS startup can adopt the concept and start with little steps.<br />
<br />
<b>War Room</b><br />
When the stuff that happens hits the fan, there is a tendency to lose one’s cool. I have witnessed executives - CEO, VP Sales, major account managers – start running around and bombarding us with questions in the best case scenario, and shouting instructions and blasphemies in the worst case. In order to be able to calmly collect information, assess the situation and act to remediate, there needs to be a place where all those involved in actually resolving the issue, can sit together, isolated from the pressure.<br />
<ul>
<li>Physical War Room– In one of the companies I worked at, I secured a separate room, packed it with a couple of large screens and communications. We prepared a list of exactly who was allowed to enter during an incident. I had the key and we actually locked the door during an incident. We had reps from Support, Ops, and Engineering and did not leave until the situation was under control.</li>
</ul>
<ul>
<li>Virtual War Room – Whether you have not built the physical War Room or an event occurred after hours, one can create a Virtual War Room using a Web based NOC and a dedicated communication group such as IM or WhatsApp. </li>
</ul>
<br />
<b>Status Page</b><br />
Create (on the corporate site – not the production site) a page that depicts the current state of your production systems with a time stamp, a color or image code, and a line of text describing the current state. This is somewhat similar to the <a href="http://www.trust.salesforce.com/trust/status/" target="_blank">Salesforce Trust site.</a><br />
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<br />
There is a new service out there - <a href="https://www.statuspage.io/">StatusPage.io</a>
- that provides much of the needed functionality.<br />
<br />
<br />
As will be discussed in the next article, this will significantly reduce the number of angry customer calls, facilitate communication and help with the <i>Closure </i>phase (third article)<br />
<br />
<b>Knowledge Base</b><br />
Another subject that merits a chapter of its own. However you realize the KB, with home-grown tools, a bunch of articles on your ITSM Help tool, Salesforce Knowledge or a dedicated tool, one must start early on, collecting how-to, tips, known problems, etc. in a central repository, with an easy search and category index. This KB could also contain admin level scripts to allow quick resolution of known issues.With a full implementation of the STORM™ Incident Mgmt, alerts will already have pointers into the relevant articles in the knowledge base.<br />
<br />
<b>Prayer</b><br />
Now that you have done your preparation work, you are in much better shape to reduce the occurrence of a catastrophic event and have the ability to respond and remediate faster. All that is left for you is to pray that it doesn’t happen at night, or at least not on a weekend night, or at least not on a holiday weekend night, or at least not when you are on your way out of the house, with the suitcases packed, on your way to your annual vacation. <!--[if gte mso 9]><xml>
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<br />
The <a href="http://saasperspective.blogspot.co.il/2014/08/saas-incident-management-best-practices.html">next post</a> discusses The Main Story - best practices <u>during </u>an incident.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-68870305392044631192014-05-19T01:06:00.001-07:002014-06-28T23:05:41.178-07:00Why ITIL is not a great fit for SaaS?<!--[if gte mso 9]><xml>
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</o:shapelayout></xml><![endif]-->"Maturity is a high price to pay for growing up". (Tom Stoppard)<br />
<br />
<span style="-webkit-text-stroke-width: 0px; color: black; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 14px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 20px; orphans: auto; text-align: left; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px;"><a href="http://www.brainyquote.com/quotes/keywords/maturity.html#DyLPX3sFFwevl9UD.99" style="color: #003399; text-decoration: none;"></a></span>
<br />
<div class="MsoNormal">
Last week I visited a customer who is a global leader in their market and that had been gradually, over the past three years, transitioning their software to the Cloud. Ther have an impressive operation and reached a maturity level that required them to take the next step - they are hiring a ITIL consultant to help them formalize their operations. I congratulated them on their initiative, but I raised an eyebrow as well.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There are many IT System Management (ITSM) tools out there;
some have been around for decades. Most are ITIL based, and since that is what
is available, SaaS Operations managers will sometime use the ITIL-based tools
that are available – This, of course, is the best case scenario, since many
SaaS Ops are managed ad-hoc, with a mixture of documents, <span style="mso-spacerun: yes;"> </span>tools, some homemade scripts and open source solutions.</div>
<div class="MsoNormal">
<a href="http://saasperspective.blogspot.co.il/2014/02/taking-cloud-by-storm.html" target="_blank">STORM™ </a>was conceived when following regular ITIL methodology
just didn’t do the job. It was either too cumbersome, an overkill, or not
accurate enough to cater for the SaaS Ops needs.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Initially, SasS Ops is similar to the IT department in
many aspects:</div>
<div class="MsoNormal">
Both teams are running the infrastructure, the applications
and the service desk for ‘other’ users, writing scripts, configuring,
monitoring, responding and in general, ‘keeping the lights on’.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
But there are significant variations that make all the
difference.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Quantity vs. Quality</b></div>
<div class="MsoNormal">
The difference between the ratio "application/users" in the two entities is
significant. In a typical enterprise there may be hundreds of applications
being used simultaneously by hundreds or thousands of users. In a typical SaaS operation there is a single application, or a very small number of applications that are used by thousands,
or tens, or hundreds of thousands of users. On top of that, there typically are a
large number of environments and stacks that are being used in the enterprise –
numerous kinds of databases, operating systems, middle-ware, network boxes, and
functional servers. In the SaaS application environment there is usually a
single kind of database, a single OS, a single type of application server, etc.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This distinction demands completely different types of
staff, skill sets, tools etc. Whereas the Ops group of a SaaS company will know
the application and environment intimately, there is no ability of the IT staff
to become as familiar with the applications as they would like. They end up
knowing a lot less about a lot more. The complexity of the enterprise
environment is therefore a hundredfold less manageable.</div>
<div class="MsoNormal">
And that does not even take into account the provisioning of
a multitude of devices that IT is responsible for, including desktops, laptops,
phones, printers, scanner, etc. taking even more attention from the application
management.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The complexity of an enterprise IT environment might justify
a CMDB, but that is an overkill for most SaaS operations that could be managed
with a simpler Asset Management solution.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Know thy Customer</b></div>
<div class="MsoNormal">
As mentioned, a SaaS company will deal with a user base that
is one or two (or more) orders of magnitude larger than the IT department.
Also, where as a SaaS company will have hundreds or thousands of customers, IT
deals with at most ten to fifteen different entities within the organization,
and perhaps a number of partners as well. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Every SaaS company is bound by an SLA with all of its
customers (some have more bite than others). The SLAs within the enterprise (if
they exist at all) are much less binding than a legal document signed with an
external entity, and there seems to be a lowered expectation as well as a more
forgiving attitude towards the internal IT organization. <span style="mso-spacerun: yes;"> </span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Therefore, while it is becoming more common for SaaS
companies to display a Status Page for the users to view the availability and
performance of production systems, it is rather rare In IT organizations. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Centrality of the Ops group.</b></div>
<div class="MsoNormal">
In a well managed SaaS company, the Operations group is the
hub of the activity. They should be communicating with all the organization’s
entities (R&D, QA, Support, Professional Services, Finance, Product and Sales)
as <i>delivery partners</i>, not as customers. In most business organizations,
IT is treated as a necessary evil; as an internal service provider that is
always behind schedule and delivering at low performance; it is rare when IT is
viewed as a delivery partner.<span style="mso-spacerun: yes;"> </span>Whereas
the Ops group is expected to participate in weekly customer success meetings,
that practice is virtually nonexistent in an enterprise IT organization.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The operations staff at a SaaS company have the ability to
affect the product behavior and “serviceability” (and in some companies they
actually are part of the MRD/PRD process), while the IT staff at the
enterprise can bitch about the problems at best, but have no influence on what
features will be included in the next version. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
For example, the application may be spewing out hundreds of Warning
or Error messages that are completely cryptic. The SaaS Ops manager has a
responsibility to sit with Engineering and map those messages to actionable
items. <span style="mso-spacerun: yes;"> </span>In the IT world, this is
practically impossible for shrink-wrapped applications. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Service continuity</b></div>
<div class="MsoNormal">
In ITIL parlance, Service Continuity deals with the ability
to provide minimal service levels, and is designed to support Business Continuity.</div>
<div class="MsoNormal">
In the STORM™ methodology, SaaS Service Continuity plays a completely
different role. It is designed to provide the continuation of the service to
the customers even when the SaaS provider is no longer an existing entity. This
could occur under positive circumstances, when the company is acquired by a
larger company or under a dire situation, when the company goes under.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Since most SaaS companies are small, many of them with little
or zero profitability, and the consolidation of Cloud providers is a daily occurrence,
customers need assurances that their services and data will continue to be available –
at least for a substantial period. <span style="mso-spacerun: yes;"> </span>Therefore,
issues such as Financial Viability, Technical Complexity, Operational Complexity,
Escrow and Data portability play a significant role and are rarely the concern of
corporate IT departments.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>In Short</b></div>
<div class="MsoNormal">
There are many other day to day factors that differentiate
IT Ops from SaaS Ops; the above discussion pointed out some of them. ITIL
provides an important, structured framework for any IT operations, and SaaS Ops
managers will benefit from familiarizing themselves with the principles and the
vocabulary. But ITIL is too complex, cumbersome and high level to be of a
practical value to the average SaaS operation. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<a href="http://saasperspective.blogspot.co.il/2014/02/storm-for-dummies.html" target="_blank">STORM™ practices</a> flattens and simplifies the
ITIL structure, and provide a practical and specific guide for an efficient and
effective SaaS Operation.</div>
Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-91290023307343361912014-04-02T03:41:00.000-07:002014-06-28T02:18:47.812-07:00To be or not to be… in the Cloud. Examining the Motivation“The undiscovered country from whose<span style="background-color: white;"> bourn no traveller</span> returns” (William Shakespeare)<br />
<br />
Yes, it is 2014 and there still are thousands of ISVs who are selling their software in the old, on-premise model. <span style="background-color: white;"> S</span>urely, many of them are doing quite well, with a large, happy customer base, which is paying for upgrades, new versions and the yearly 20% maintenance fees.<br />
<span style="background-color: white;">Nevertheless,</span> <span style="background-color: white;">I doubt</span> there is even a single board of directors that is not considering going to the Cloud.<br />
Everyone wants to be in the Cloud. Many ISVs have started offering their services as a Hosted solution (claiming that they provide SaaS) just to have a presence there, and have added a little cloud to their logos or landing page to enhance that impression.<br />
<br />
<b>The Motivation</b><br />
I have been advising ISVs for over a decade on their move to the Cloud (or SaaS as we old-timers still call it). It is surprising though, how many of the companies I consulted to couldn't articulate why they were doing it.<span style="background-color: yellow;"></span><br />
I always begin with a Motivation session where the C-level staff is gathered to discuss what their thoughts on the matter are, and I find out, time after time, that there is no consensus on this matter.<br />
Since the transition from a Product company to a Service company is so profound, the paradigm change so deep and the costs are not trivial (sometimes they could bring a company to its knees), it is crucial to understand why<span style="background-color: white;"> the ISV is</span> willing to set on this adventure.<br />
The discussion below outlines the various reasons why an ISV <i>should</i> invest in this process. <br />
<br />
<b>Everyone is in the Cloud</b><br />
Yes, it is<span style="background-color: white;"> fashionable</span>, and I don’t belittle this motivation. Sometimes a company must have a presence in the Cloud for marketing purposes, just because it is expected and the company brands itself as a forward looking endeavor. But is this a <span style="background-color: white;">good </span>enough reason ? I would look into the next items to try to justify the move which is by no means a simple one.<br />
<br />
<b>The employees are demanding it</b><br />
As flimsy as it may sound, this is not dissimilar to the previous motivation. The workforce is getting younger (in age and in mentality). Employees who think that the company is not ‘with it’ might start looking elsewhere, to companies that are more on the bleeding edge of the technology and market. Although this should not be a major consideration, it still is a consideration and might tip the balance toward a decision.<br />
<br />
<b>The competition is offering it</b><br />
As we all know, SaaS solutions are very attractive from many perspectives. If there are a number of new, pure-play SaaS companies that are starting to bite into your customer base, this is a serious consideration. But, it should not be the only consideration; one must examine and compare exactly <i>what </i>the competition is offering. Many times, SaaS companies will offer a small subset, or an over-simplified solution of what your product does. If the competition is up-to-par in most aspects of your solution, you may already be fighting a retreating battle. If not, it is possible that you may lose the smaller customers but could still have an advantage in the larger companies. If this is the case, you should consider the transition to SaaS, while maintaining your advantage, rather than compete with the smaller players.<br />
<br />
<b>Your customers are demanding it</b><br />
<span style="background-color: white;">That is a very compelling argument.</span> No one knows better that your own customers.<span style="color: lime;"> <span style="color: black;">If customers are requesting an Cloud solution</span></span>, the company should listen carefully. Still, it is important to engage with the customers and understand exactly what it is they are looking for in a SaaS solution. Perhaps it is the recurring payment option – that could be done with an on-premise solution as well. Perhaps they are looking for certain features. Maybe it would make sense to offer new options in an integrated version, rather than rewrite the whole application from start.<br />
<br />
<b>You want to expand into a new customer base</b><br />
Often times, the SaaS option will allow a company to reach out into a large customer base that was below the radar because of price or complexity. While you were selling to the high end customers, there might be a <span style="background-color: white;">vast group </span>of smaller businesses that could benefit from your solution, but were always out of reach. If this is the great motivator, one should carefully examine <i>what</i> should be offered. Is it the same set of features? Is it a light weight version, or a subset? Are your potential, future SaaS customers different from your existing customer base, not only in size but in their needs ?<br />
<br />
<b>You want to expand into new territories</b><br />
One of the advantages of SaaS is “Anytime-Anywhere”. While the old model necessitated local presence for sales and professional services, the SaaS model will allow the company to sell around the globe without the need to have ‘boots on the ground’. If your local market is saturated, SaaS is a great venue to reach out to the other side of the globe without the expensive and complex logistics it used to take to make that happen. Here again, it is important to articulate what will you be to selling the customers in the geographies; not necessarily the same as the local offering.<br />
<br />
<b>To be – Of course</b><br />
The discussion above does not suggest that after examining the motivation, one would conclude <i>NOT</i> to offer a Cloud solution. Of course <span style="background-color: white;">every ISV</span> will have to be there sooner or later, otherwise it will become obsolete. But going through this thinking exercise will allow you to define your approach. Understanding the motivation will help identify the target market, the go-to-market approach, the timing and the offering itself.<br />
<br />
As an example: A large <span style="background-color: white;">British</span> ISV I worked with, wanted to switch to SaaS by taking its flagship product to the Cloud. After going through the process we came to the conclusion that their product was a cash cow for the foreseeable future, and there was no reason to dive into such a large undertaking at this stage. Instead, the decision was to develop a LITE solution to offer to different customer types in new geographies. This allowed the ISV to experiment with a less demanding task, while learning the ropes of the new architecture and new market approach. I am happy to say that they are launching their SaaS solution these days in two new territories.<br />
<br />Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com2tag:blogger.com,1999:blog-30539899.post-12598733599182486672014-03-15T14:17:00.001-07:002014-06-28T02:21:19.046-07:00SaaS Customer Success – Best Practices (Part 2)“There are two rules for success: <br />
1. Never tell everything that you know” (Roger H. Lincoln)<br />
<br />
<b>Company Culture and Customer Success</b><br />
In <a href="http://saasperspective.blogspot.co.il/2014/02/saas-customer-success-best-practices.html" target="_blank">my previous post</a>, I discussed perspectives that dealt with the technical and formal issues of improving customer success. It suffices to remember one fact – companies are more successful when their customers are more successful. In this article I will talk about a crucial facet of SaaS: company culture - that not only affects Customer Success, but many other aspects of running a successful SaaS operation. <br />
(I have written about Culture in a <a href="http://www.israelsaascenter.com/#!articles/vstc2=culture" target="_blank">number of articles</a> in the past – some posts are pointed out)<br />
<br />
<b>Multiple Touch Points </b><br />
In the on-premise business model, the touch points with the customer moved slowly from one part of the organization to another: Sales and Pre-sales were engaged with the customer at the beginning; then Professional Services engaged with the customer until implementation was complete. Following that stage, the ISV did not interact much with the customer. There may have been a yearly status call; sometimes the customer inquired about bugs or perhaps sent a request for features that was pushed into a waiting list. (The product may even have been sold through a VAR, leading to an even larger disconnect).<br />
<br />
In the SaaS model, at any given moment there could be multiple touch points with the customer: The end users may be speaking with Support, while the customer IT is talking with the Ops group; the customer business manager is engaged in a call with Sales, while the CIO is speaking with the SaaS CEO about the latest outage, and Finance on both sides are figuring out last month’s bill. Some SaaS companies assign Technical Account Managers to large customers, but that would not alleviate the problem if end users continue calling Support, or IT happens to be talking with the network manager in the Ops group. In any case, TAMs are only assigned to a few, large enterprise customers and this will not work out if the company has hundreds or thousands of active customers. <b><i> </i></b><br />
<b><i>Mapping the touch points of the customer </i></b>is therefore essential, and making sure that everyone who might have contact with the customer is using the CRM (or equivalent - I know, it is not cheap)<span style="color: purple;">. </span><br />
<b><br />Need for Speed</b><br />
Everything switches to <b><i>Fast-Forward</i> </b>in SaaS. The sales cycles are shortened by at least an order of magnitude. The release cycles are shorter through agile methodologies and DevOps technologies; the impact of bugs is immediate <span style="color: red;"><span style="color: black;">(the</span> </span>new version is released at night and the following morning thousands of users interact with the software) and the response from the customers is almost instantaneous. Customers expect a fast turnaround and Information about success or failure travels as fast as the latest Tweet. Numerous customers may be added in a single day through self-service, or might churn at the end of the month.<br />
<br />
Therefore, SaaS companies<b> must</b> shift into high gear. Especially if they come from the old, legacy, on-premise world, where the staff is used to much longer cycles in every aspect (I have been giving seminars at these old-world companies to emphasize that fact and push for cultural change). Quickness of response, of decision making, and pro-activity result from the elements discussed below: <b><i>Transparency, Communications, </i>and <i>Openness</i>.</b><br />
<br />
<b>Transparency</b><br />
I have written in the past about Transparency and it is still <a href="http://saasperspective.blogspot.co.il/2009/08/transparency-in-saas-service-operations.html" target="_blank">a valid article</a>. I do not wish to recycle old material but suffice to say that customers will not only appreciate the openness and honesty as a virtue; they can also benefit from the knowledge while helping your company improve. When service is down, or slow, or erroneous, covering it up will not make your customers feel more confident. If you discuss the issues with them (s**t happens, you know,) you may work out together how to deal with service degradation in the future; that will help them become more successful.<br />
<br />
When you promise a certain feature that you know will not be delivered on time or as expected, you may gain a few weeks of industrial peace, but that will clearly not make your customers more successful. If, instead, <span style="color: orange;"><span style="color: black;">you openly share the status of your release, your customers would be better prepared.</span> </span>Working together, you may formulate an alternative solution that will allow the customer to succeed while reinforcing the ties between the companies. <br />
<b><br />Communications and Openness </b><br />
The fact that almost anybody in the company might be in touch with someone on the customer’s end and that everything has sped up means that inter-department communications is crucial and internal transparency is a must. There is not time for ego games, or gaining an edge by holding important information close to one’s chest. <br />
Transparency within the company is crucial (there usually is a correlation between external and internal transparency). If you promote a culture of openness and acceptance of mistakes, problems will be reported earlier and be dealt with the maximum available information, therefore reducing their negative impact. Both the company and its customers will benefit.<br />
(Recommendations for periodic meetings can be found in my article on <a href="http://saasperspective.blogspot.co.il/2009/11/inter-department-communications.html" target="_blank">Inter Department Communications</a>)<br />
<br />
<b>Service Level Agreements</b><br />
The Support staff usually take the first hit when bad things happen, but every employee must understand the impact of service degradation. Make sure people empathize with what it is like not to be able to complete the task that the end user is evaluated on. <br />
SLAs are usually regarded as a necessary evil, forced upon the SaaS provider by a standard expectation in the market, and is usually reduced to the minimal accepted level. (read more about <a href="http://www.israelsaascenter.com/#!articles/vstc2=sla" target="_blank">SaaS SLAs</a>).<br />
But, imagine a company that takes it SLAs seriously, that thinks about the Service Levels that it provides its customers and that is proud of what it can offer to the end users and is open about it. <br />
Imagine that someone within that company actually <i>read </i>the SLA and thinks about how to improve the Service Levels, not only the dead horse of the Availability section. Imagine what that might do to <u>enhancing customer success!</u><br />
<br />
<b>A Point about Priorities</b><br />
Some companies emphasize that the ‘Customer is Always right’ and keeping the customer satisfied is the top priority of the establishment. With other companies, making the shareholders happy is the major driving force. <br />
<br />
The following observation is based on my subjective experience and understanding and has no scientific or statistic corroboration:<br />
If you manage to make your Employees <b><i>Proud, Dedicated and Happy</i></b>, they will make your Customers <b><i>Paying, Loyal and Happy,</i> </b>which will make your Shareholders <b><i>Fat, Supportive and Happy</i>.</b><br />
<br />
This is why company culture is so crucial. Getting people excited and unified behind a common goal of excellence and customer success will result in <b><i>Excellence </i>and <i>Customer Success</i>.</b>Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-55066030191194003982014-02-28T23:02:00.001-08:002014-06-28T02:23:41.611-07:00SaaS Customer Success – Best Practices (part 1) “The only place where success comes before work is in a dictionary” (Vidal Sassoon)<br />
<br />
<b>Nostalgia</b><br />
In 2003 I was managing the operations of Mercury Managed Services (today, <i>HP SaaS</i>). A large Mercury customer was about to give up on the product as he could not manage the complex in-house requirements, and was suffering from too much downtime. The capable account manager convinced the customer to switch to the SaaS model for a higher (!) price than what they were originally paying.<br />
After a complex migration project the customer switched over and in the first week of the service we noticed a problem with the migrated data causing errors in the process. I called the application manager and apologized that we needed to take down the service for two hours until we fixed the problem (We abhorred the idea of more than a few minutes of downtime). The guy was ecstatic, happy as a puppy with two tails. I cautiously inquired why he was so pleased when I informed him of the service being unavailable. He told me that in the old model, no one would notice there was a problem, and when IT was notified of the issue it would take them two days to respond and a week to fix, and here we knew of the problem in real-time and service will be restored within two hours!<br />
Obviously, customer satisfaction is a matter of expectations; within a few months this particular one got used to high availability and started complaining of less than outstanding response times.<br />
<br />
So then, customer success is a combination of <i>real value</i>, of <i>perceived value</i> and <i>TLC </i>– Tender Loving Care.<br />
<br />
<b>Do it right the first time</b><br />
As I have written in a <a href="http://saasperspective.blogspot.co.il/2011/10/cac-ltv-mrr-translating-saas-financials.html" target="_blank">previous post</a>, the cost of acquiring new customers is between five to seven times more expensive compared to retaining existing customers, yet most SaaS CEOs/VP Sales are focused on new customers, optimistically hoping that ‘once a customer always a customer’. <br />
From a recent poll conducted by <a href="http://www.slideshare.net/totango/2013-totango-annual-saas-metrics-survey" target="_blank">Totango</a> it is evident that the fastest growing SaaS companies “…have a significantly better record on <i>churn </i>and <i>upsell</i>, underscoring the critical role of managing revenue from existing customers…”. In other words,<i><b> </b><u>being successful in the SaaS model means that you have to make your customers successful.</u></i><br />
Bellow, I provide a list of best practices that a SaaS company should follow to improve Customer Success; of which Customer Satisfaction is a crucial but not sufficient factor.<br />
<br />
<b>Real Value – Perceived Value</b><br />
Let’s start with something as trivial as bringing value to the customer. Obviously your service/product has to provide an advantage to the business that was not there previously, but many times the users may not be even aware of the real value. If the end user is coerced by her boss to use a certain business process without her seeing the value in it, it is not going to fly. Or, if the service was procured by a business manager that wanted a simple function that was not available or affordable prior, it could be that the users are not even aware of the full range of functionality (‘value’) of the offering.<br />
Therefore it is crucial that the SaaS company be aware of the reasons why people are using (not using) the service, what their expectations are and how they perceive the value. This can only be done through engaging the end-user, not just the business entity that is paying for the service.<br />
Which is a perfect segue into the next item…<br />
<br />
<b>Customer engagement</b><br />
Remember the ‘good’ old days where R&D defined the product, the needs and the functionality? We’ve come a long way since, with Product Marketing defining the offering and releases; still, it is not clear how much real feedback is being collected and integrated into the roadmap.<br />
How do you know what makes your customers successful? <u><b>Ask them</b></u>. Direct calls, forums, surveys, any means available to you. Involve the customer in the process. Ask for feedback on the product, workflows, and features. The end users typically would love to voice their opinion, to know that what they think is important. <br />
The best venue for this kind of engagement is building a community around your service. Whether using a LinkedIn or FaceBook group or building your own community page in the corporate site. Create forums, discussion groups, a Q&A/FAQ section, an expert panel and blogs. This serves both as an invaluable source of knowledge into your customer’s deepest desires but also enhances loyalty. Consider gamification to promote participation in the community.<br />
<br />
<b>Branding</b><br />
The community engagement is highly important for building your Brand Name. You want people to remember your name, and in a positive way. Twitter, FaceBook and other social media will kill you as easily as promote you. You must be aware of what is being discussed, chatted or Tweeted about you on any network and try to engage angry users and deal with their issues, real or imaginary.<br />
<b><br />Tell them they are successful</b><br />
If you, as the service provider, know what brings the customer value, make sure <i>they know it as well</i> and can gauge it. Provide ‘success’ reports and ‘success’ dashboards as part of your product offering. Whatever metrics that you can define as gauging success, let them <i>know</i> how your service improves it, every time they use your software.<br />
<br />
<b>Know what is going on</b><br />
“If you can’t measure you can’t improve”. There are two areas in which you must make sure you know what is going on. The first is Churn Management. You should be able to collect every bit of information on why customers left you, after how long, how big were they (revenue and company size), who was responsible for the engagement, etc. Only by analyzing, trending and reviewing this data will you be able to predict future behavior, identify telltale signs and reduce your churn.<br />
The other area is how your product is being used by your customers. You could analyze log files and perhaps fields in your web pages, or use ready-made solutions such as <a href="http://www.totango.com/" target="_blank">Totango</a>. Totango’s analytics and reports allow you to identify behavior indicating loss of interest, or patterns leading to disengagement. In addition, they can show you which components of the service are being used by whom, and when (e.g. EOD, Weekends), and which paths are abandoned in the midst of the flow. This can all be fed back to Product Management to improve the service and the experience, and therefore the customer’s success.<br />
<br />
<b>Integration</b><br />
While your solution may be the best thing since sliced bread, your users do not live and work in a vacuum. There have been business processes in your client’s organization and other SaaS and onsite software in place long before you came into the picture. You must make sure that your SaaS application blends seamlessly into your user’s working day. This means allowing them to import or export data and tasks to the other applications they are already using the run their business and smoothly switching between applications (through SSO). SaaS entrepreneurs tend to focus so much on building a great application that they sometimes forget that true success occurs when you users start to see you not as an application but as a platform. Integrations are one of the ways to become a platform. <br />
<br />
Having a good base of integrations also makes your customers decision to buy & use your product a much easier one. There is a wide variety of integration consulting companies and integration and SSO SaaS solutions out there. There is also a new breed of companies like <span style="color: blue;"><a href="http://www.bondable.com/" target="_blank">Bondable</a></span> which enable SaaS businesses to build integrations with other SaaS businesses, without having to constantly maintain these integrations.<br />
<br />
<u><i>Keep in mind that the more you are integrated with other services, the more ‘stickiness’ it adds to your solution and the more difficult it becomes to disengage</i><b>.</b></u><br />
<br />
<b>Culture</b><br />
In the next post I will talk about<i><b> company culture</b></i> and its direct impact on customer success. It is important enough to merit a standalone post.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-36106993517766130512014-02-07T09:52:00.000-08:002014-06-28T23:06:01.225-07:00STORM™ For Dummies (part two)<!--[if gte mso 9]><xml>
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<br />
<span style="mso-bidi-language: HE;">This is the second part of my <a href="http://saasperspective.blogspot.co.il/2014/02/storm-for-dummies.html" target="_blank">previous post.</a></span><br />
<span style="mso-bidi-language: HE;"> </span><br />
<span style="mso-bidi-language: HE;"><b>Communication Management </b></span><br />
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">Back in the days of
shrink-wrapped software, the ISV usually had a<u> single touch point with the customer, i.e. IT.</u> All issues on the customer’s end were addressed by their IT department,
and what they could not resolve would find its way to Support (sometimes,
months later). </span></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">But with SaaS this is no longer the case. The customer CIO</span><span style="background: white; color: #333333; font-family: "Georgia","serif";"> </span><span style="mso-bidi-language: HE;">may have a direct line to the SaaS CEO. IT may be
in touch with professional services, and customer business managers could be speaking
with the Program Management group. The Ops group will inevitably be in touch
with supervisors or IT managers on the customer side, and Sales will have
developed personal relationships with managers on the customer’s side, as they
nurture the relationship to expand the sales in-house. And, of course, the end
users might be in daily contact with Customer Support. </span></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">If all these functions
within the SaaS company do not talk to each other, if they do not share the
info about the customers, there is potential for embarrassing situations that
lower customer confidence and loyalty. <span style="mso-spacerun: yes;"> </span>E.g. imagine a Sales rep calling the customer
to up-sell a service, and that customer informs the rep that the service is
down right now and that he might consider switching to the competition.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;"><u>The Ops group is the hub
of all the service activity</u>. It deals with R&D, QA, Professional Services,
Customer Support, Sales, the Customers and the Service Providers. It should
initiate and manage daily, weekly, bi-weekly, monthly and quarterly meetings with
the various functions and provide communication channels with the end users and the
customer’s managers.<span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">Communication with
customers takes many shapes and forms. It can be via email, phone calls,
quarterly meetings, an RFO, notifications on the application message board or
via the Status Page web site.</span></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">You won’t find ‘<b>Communication
Management’</b> in any ITIL/ITSM vocabulary, but the importance of it cannot be
overestimated. </span></div>
<h1>
<span style="font-size: small;">Release Management – um, DevOps?</span></h1>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">So, we want to upgrade to the newest features or bug fixes. In today’s very complex environments, with multiple
configurations, possibly geographically distributed, some on real servers, some
on virtual ones, the management of a release update could be a grueling task. This
is where automation becomes crucial. This is a growing discipline with many cool products and tools, making strong use of virtualization. </span></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">Although </span><span style="mso-bidi-language: HE;"><span style="mso-bidi-language: HE;">it has become the norm in the industry
that DevOps is all about configuration automation scripts, </span>I would argue that<u> DevOps is nine
parts communication, one part automation</u>, </span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">I claim that </span><span style="mso-bidi-language: HE;"><span style="mso-bidi-language: HE;">between Change and Asset Management, </span>with agile
development and Continuous Delivery, <u>Release
Management is not much of a discipline of itself</u>, but part of the orchestration and
conversation between Product, Engineering, QA and Operations.</span></div>
<h1>
<span style="font-size: small;">Operations Intelligence - OI</span></h1>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">There are other aspects
of STORM™ that are not covered in this short article (e.g. <i>Churn Management, Cost Management, Service Continuity, Team Building, Product Serviceability</i>), but a crucial derivative of a good STORM solution is <b>Operations Intelligence</b>.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">Collecting and compiling
all the reports of the STORM practices in a repository allows the management of
the SaaS vendor to gain insight into the Operation of the company, assess
progress and plan for next steps to improve the overall Service Operations of
the provider.</span></div>
<div class="MsoNormal">
<br /></div>
<br />
<u><span style="mso-bidi-language: HE;">The executive team must
be able to answer questions such as:</span></u><br />
<ul>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"> </span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">How are we really doing vis-a-vis our SLAs?</span></li>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">How long since our last downtime?</span></li>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">What do we invest our next dollar in?</span></li>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">What are the main causes of our customer churn?</span></li>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">How many changes have succeeded, failed, rolled-back?</span></li>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">Which components are most troublesome?</span></li>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">What customers might be affected by changes to this particular asset?</span></li>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">How are our TOP 10 customers fairing?</span></li>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">Are we improving with our incident management?</span></li>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-language: HE; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span dir="LTR"></span><span style="mso-bidi-language: HE;">How do the last twelve trailing months look like?</span></li>
</ul>
<br />
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">The ability to gain
insight into the various aspects of the Service Operations allows to plan more
sensibly, focus efforts and resources where needed and improve the clockwork,
therefore improving customer satisfaction and loyalty</span></div>
<h1>
<span style="font-size: small;">The Dummies</span></h1>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">The title “STORM™ for Dummies”,
is not just a marketing play on the ‘X for Dummies’ series – there is a
philosophy behind it as well. Software developers are bright, creative,
out-of-the-box thinkers that may disregard the rules in search of a better
solution. Smart, creative people do not necessarily make a good operations
team.</span></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">Service Operations is a routine,
day-to-day, unimaginative process. You want to have the best people at your
disposal and to have them respond in creative ways to unexpected events. But,
you want to reduce the unexpected events to a minimum and make sure you cover
all bases. And when an unexpected event does occur, you want to make sure that
lessons have been learned, so that next time it will become part of the
routine.</span></div>
<div class="MsoNormal">
<span style="mso-bidi-language: HE;">The Dummies will benefit
from the fact that all they have to do is follow a rigorous routine, so they
can go home, have a beer and play with their kids instead of staying around
late and figuring out creative ways to deal with the current crisis (now tell
me, who is the dummy?).</span><span dir="RTL" lang="HE" style="font-family: "Arial","sans-serif"; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Arial; mso-bidi-language: HE; mso-bidi-theme-font: minor-bidi; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"></span></div>
Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com2tag:blogger.com,1999:blog-30539899.post-31743424408463702672014-02-05T07:42:00.000-08:002014-06-28T23:06:17.693-07:00STORM™ For DummiesThis is the first of a two-post article. As I promised in my previous post, <a href="http://saasperspective.blogspot.co.il/2014/02/taking-cloud-by-storm.html" target="_blank">Taking the Cloud by STORM™</a>, I will elaborate here on the various practices.<br />
<br />
<b>Change Management</b><br />
Curiosity killed the cat? Change is what killed the cat – I’m talking about Schrodinger’s cat, and if you don’t know what I’m referring to, just keep in mind that a tiny change in a subatomic particle is what caused the cat’s <i>permanent downtime</i>. <br />
In a broad sense, <u>Change is what causes all service degradation</u>, whether full downtime or bad response times. In other words, “if it ain’t broke, don’t fix it”. But changes are always needed in your SaaS environment, whether adding another web server to the load balancer, changing a configuration file or upgrading the software overnight. Add to that the fascinating fact that <u>between 60%-70% of service disruption is caused by the human factor. </u><br />
So, Change must be done very carefully. There are so many things that can go wrong, that one needs a disciplined routine that takes as many factors into consideration as possible, and done in a rigorous manner, following precise instructions. It includes the <i>Change Request</i>, the <i>Change Calendar</i> and <i>Window</i>, the <i>CAB</i>, the <i>Operations Maintenance Plan</i>, the <i>SOPs</i> and the <i>Change recording</i>. This is what <b>Change Management</b> is all about.<br />
In my many years in the field of SaaS Service Operations I have witnessed all the possible horror scenarios at SaaS companies where Change Management was at best very meager, and usually nonexistent.<br />
<br />
<b>Asset Management</b><br />
Changes are done to Assets. An Asset could be as large as a datacenter (new router that affects all boxes), it could be a database cluster (upgrade of the Oracle RAC) or as small as a JPEG file embedded in an HTML document. In an ideal world, a SaaS company would deploy a CMDB (Configuration Management Database) with a team of administrators that do nothing but maintain it. But in the real world, as SaaS companies grow from two to four to ten boxes and beyond, the assets are maintained, in a best case scenario, on an excel worksheet on the sys-admin’s laptop. <br />
When a change is performed on an asset there is a need to understand the possible impact on other assets, or on customers, and it needs to be documented. An <b>Asset Management</b> solution records each asset with relevant information (name, IP address, location, function, make etc.), records the relationship to other assets and maps that asset to a customer (or group of customers). When change is performed to an asset, the Change Management system will point to the relevant asset and record the history of modifications to that asset.<br />
<br />
<b>Event Management</b><br />
With the understanding that changes to assets cause bad vibes, we need to look out for changes and understand their effects. That is done mainly by monitoring and responding to reported changes. Look at as many attributes of your assets and detect when things have changed. High CPU, low disk space, an OS service that has stopped functioning, long response times, etc. But detecting the change is not enough; how do you respond to the changes, when do you determine that a change is cause for trouble? How much automation should you employ? (short answer: a lot). What do you do when a threshold is reached? How do you control Alert Overloading? How do you build Escalation into the alert mechanism? This is what <b>Event Management</b> deals with.<br />
<br />
<b>Incident Management</b><br />
OK, so you are now practicing a robust Change Management regime, with all your Assets accounted for and monitored with a good understanding of impact of changes to your service. You are in much better state than before, but will service disruptions still happen? Of course they will! They will bite you when and where you least expect them to. What to do! What to do?<br />
One option is running around hysterically screaming “the sky is falling” and shooting in all directions, while making sure you cover your behind in anticipation of the blame game that will surely take place after the crisis is over.<br />
Another option is to implement <b>Incident Management</b>. IM covers all aspects from <i>Detection</i>, through <i>Recording</i>, <i>Classification</i>, <i>Notification</i>, <i>Escalation</i>, <i>Diagnosis</i>, <i>Resolution</i>, to <i>Closure</i>. All in a cool headed manner, following a well trained routine that will allow the company to analyze the incident and apply lessons learned so that you will not face this particular crisis again.<br />
<br />
<b>SLA Management</b><br />
And then, some (or all) of you customers will require that you adhere to your SLA; but who knows if it was breached? Sometimes it is very clear- the system was down for an hour - everybody was affected and the SLAs were breached. But many times, it could be degradation of the service, or partial downtime. Who knows which customer was affected by what and for how long? This is where <b>SLA Management</b> comes in, and why it is so important to have Incident Management in place, so that one can compare the actual damage with the particular SLA. The other option is going through a bunch of printed documents (if you can even find them), trying to figure out for each customer what their agreement covered, and if it was breached, should they be compensated and how much.<br />
<br />
<br />
<br />
In the next post I will discuss <i>Communication Management</i>, <i>Release Management</i> (DevOps), <i>Operations Intelligence</i> and <i>The Dummies</i>.<br />
<br />Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-6509339705668291642014-02-03T04:37:00.003-08:002014-06-28T23:06:34.667-07:00Taking the Cloud by STORM™<b>STORM</b>™ - <b>S</b>aaS <b>T</b>actical <b>O</b>perations <b>R</b>esource <b>M</b>anagement<br />
<br />
Like an experienced and greasy auto mechanic, there is not a single mistake that I have not done (or witnessed) throughout my years as managing Operations from Fortune 500 companies to startups. I have learned from my experience and painstakingly put together a set of practices that <u>dramatically improve the quality of life for the whole team and the satisfaction level of the customers</u>. IT JUST WORKS! There is no reason for a SaaS company to improve only after making mistakes that have previously been made by others.<br />
<br />
Extraordinary people, great products, domain knowledge, specialization and wonderful intentions are the ingredients that bring and make success; yet sloppy SaaS service operations management will break that success. <br />
SaaS companies always end up paying a heavy price for doing something they do not excel in – <u>Service Operations</u>. <br />
<br />
<b>STORM™ - SaaS Tactical Operations Resource Management</b>, is a comprehensive methodology for managing the Service Operations of a SaaS Company. It includes a set of practices that have been defined over years of building Operations at SaaS companies and consulting to SaaS companies on excellence in Service Operations.<br />
<br />
<b>S</b>aaS<b> </b>– While using ITIL terminology, STORM is not for general IT. Nor is it for any general service provider. The Methodology was devised specifically for the unique needs and characteristics of SaaS companies.<br />
<br />
<b>T</b>actical<b> </b>– Other methodologies offer high-level frameworks. STORM defines how to handle every aspect of the Service Operations, providing workflows, reports and templates and defining tools, so that a SaaS company could very quickly adopt these practices and put them to use.<br />
<br />
<b>O</b>perations<b> </b>– the hub around which all the service revolves, in a SaaS company. Connecting Engineering, QA, PS, Sales, Finance and Customer Service.<br />
<br />
<b>R</b>esource<b> </b>– Dealing with all the assets of the service – Px4 (People, Programs, Practices and Property)<br />
<br />
<b>M</b>anagement<b> </b>– comprehensive methodology giving management visibility and decision making tools<br />
<b><br /><u>STORM Principles</u></b><br />
At the highest level, STORM deals with three notions:<br />
1. <u>Enabling a smooth, efficient and effective day-to-day management of the Service Operation</u>: <br />
While dramatically reducing the human error factor, the smooth operation ensures that although the service is up 24X7, the staff can enjoy a good night's sleep and weekends with their families.<br />
2. <u>Allowing management to view, control and understand the components the Service Operation</u>: <br />
Keeps the decision makers on their toes and provides them with the visibility of the status of various parts that make up the service.<br />
3. <u>Provide a better customer experience</u>: <br />
Thus keeping your customers happy, growing the revenue and reducing churn<br />
<br />
<u><b>STORM Practices</b></u><br />
The methodology contains a number of crucial practices that cover every aspect of the service operations of a SaaS company. These are (mostly using ITIL parlance):<br />
<ul>
<li>Asset Management</li>
<li>Change Management</li>
<li>Incident Management</li>
<li>Event Management</li>
<li>Release Management (as part of DevOps)</li>
<li>SLA Management</li>
<li>Churn Management</li>
<li>Costs Management</li>
<li>Communication Management</li>
</ul>
<br />
<u><b>SaaS Operations Intelligence</b></u><br />
A central component of STORM is SaaS Operations Intelligence, or SOI.<br />
Through a smart collection of data from the various practices (which require tools to collect that data), reports are produced to derive crucial strategic insights of the Service Operation and enhance decision making as to what may be lacking in the service and where to invest the next dollar.<br />
<br />
Samples of these reports are:<br />
<ul>
<li>Change Analysis</li>
<li>Incident Analysis</li>
<li>SLA Analysis</li>
<li>Churn Analysis</li>
<li>Customer / Asset Mapping</li>
<li>Impact Analysis</li>
<li>Costs Analysis</li>
</ul>
<br />
<u><b>Why STORM?</b></u><br />
ITIL or eTOM (Enhanced Telecom Operations Map) just don’t cut it for SaaS. There are too many unique characteristics of a SaaS operation that are not being addressed by existing methodologies. (I will explore this theme in a future article).<br />
Throughout the years I have written extensively on SaaS Service Operations. <br />
<ul>
<li>Most SaaS companies that I have worked at and consulted to, have similar traits and are suffering from the same problems (see <a href="http://saasperspective.blogspot.com/2008/08/your-typical-saas-operations.html" target="_blank">Your Typical SaaS Operations</a>). </li>
<li>Most SaaS companies have a problem with Operational discipline and are suffering from Operational Fatigue (see <a href="http://saasperspective.blogspot.com/2009/08/discipline-or-lack-thereof-and.html" target="_blank">Discipline (or lack thereof) and Operational Fatigue</a>). </li>
<li>Most SaaS companies are not doing a good job managing their SLAs (see <a href="http://saasperspective.blogspot.com/2009/11/sla-management-in-saas.html" target="_blank">SLA Management for SaaS</a>).</li>
<li>Most SaaS executives cannot answer basic questions about their service since they do not collect the metrics (see <a href="http://saasperspective.blogspot.com/2009/05/questions-that-saas-executives-must-be.html" target="_blank">Questions that SaaS executives must be able to answer - KPIs that matter</a>). </li>
<li>In many companies Change Management is akin to wishful thinking and usually results in disastrous events. (see <a href="http://saasperspective.blogspot.com/2010/03/change-management-and-sanctity-of.html" target="_blank">Change Management and the Sanctity of Production</a>). </li>
<li>I have seen (and worked at) SaaS companies that do not exchange critical information in real time thus causing inefficiency and embarrassment (see <a href="http://saasperspective.blogspot.com/2009/11/inter-department-communications.html" target="_blank">Inter Department Communications</a>). </li>
<li>Fast growth is a blessing but SaaS companies break at the seams on scalability issues (see <a href="http://saasperspective.blogspot.com/2009/11/inter-department-communications.html" target="_blank">2 x E-cube = S-cube - Simple math for SaaS Scalability Succes</a>s and<a href="http://saasperspective.blogspot.com/2010/11/saas-scalability-and-three-little-pigs.html" target="_blank"> SaaS, Scalability and the Three Little Pigs</a>).</li>
</ul>
<br />
A methodology that is addressed specifically at SaaS companies, dealing with real issues that plague most SaaS companies is needed. <br />
The STORM methodology has been successfully fully or partially implemented at SaaS companies and has delivered immediate results.<br />
<u><br /><b>STORM Automation</b></u><br />
STORM methodology contains practices that can be implemented using simple tools (I have employed MS-Word, Excel, Google Calendar, some scripting, HTML and Bugzilla). <br />
However, STORM’s full value is realized when it is supported by automated workflows, data entry forms and data bases. The SOI component is very hard to realize without an SQL database, tools capturing the data and report generators. <br />
Still, a great value can be derived just from following the practices in a disciplined manner, using productivity tool templates and simple repositories.<br />
<br />
In the next article I will expand on the various practices and in future ones I will differentiate it from ITIL (and somewhat, from eTOM), and layout the basic principles.<br />
<br />Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-90185628187157892632014-01-27T10:16:00.000-08:002014-06-28T02:49:39.435-07:00Bring Ops back into DevOps<br />
“Ownership is yet another of the endless forms of arrogance engaged in by the lower self.” <br />
― Bryant McGill<br />
<br />
Two items caught my attention in the past week.<br />
One was an invitation for a DevOps event in Tel Aviv. Lots of flair, keynote speakers, demos, you name it. On the bottom, underlined, it was written <b>“registration for developers only”</b>.<br />
What? Really? <br />
<br />
A few days later I saw a recruitment ad for Director of Operations for an upcoming SaaS company, in Silicon Valley, no less. “<b>… the Director of Operations will report to the VP of Engineering</b>”.<br />
I even read an article (don’t remember where – I should have bookmarked it) that DevOps is great since it <b>returns control over production to Engineering</b>, like in “the good old days”.<br />
<br />
It felt like a trip in a time machine that landed me in the early 2000s.<br />
<br />
Looking up DevOps in a Google search, it is all about configuration automation for Release Management, scripting languages as Ruby, courses for developers and such. No wonder Engineering feels so much at home. <br />
<br />
When I took my first job as VP Service Operations in a SaaS company, I had to wrestle Production out of the hands of Engineering. I had to change the passwords to the production servers and wean the developers off the habit of changing the environment when they had a ‘safe and quick’ fix. They went home to their families in the evening. They were not on the 24x7 call list.<br />
It took some time for the VP Engineering to come to terms with the new reality; imagine having to report to him while doing the job.<br />
<br />
And yes, we used configuration automation scripts even back then, but they lacked the aura of ‘DevOps’. It was all about discipline, Change Management, Asset Management and careful planning, as covered in my <a href="http://saasperspective.blogspot.co.il/2013/12/hey-developers-youre-missing-point-of.html" target="_blank">previous post</a>.<br />
<br />
Chef, Puppet, Docker and the other mechanics are great tools, but they should enhance DevOps, not replace it. <u>The first principle of DevOps is a culture of collaboration / cooperation / communication</u>. Making the Ops team feel like an outsider is not going to help.<br />
<br />
At the end of the day, Ops is left with task of keeping the light on, responding to outages 24x7, and taking the rap for service degradation.<br />
<br />
<u>So, just as SaaS is more about the <i>Service </i>than the Software, so is DevOps about the <i>Operations </i>more than Development</u>.<br />
<br />
Let the cowboys do what cowboys do best, and bring the ranchers back into the farm.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-31807067020842272013-12-19T04:42:00.000-08:002014-06-28T02:49:58.401-07:00Hey developers – you’re missing the point of DevOps<h3 style="text-align: center;">
<b>DevOps and SaaS Service Ops</b></h3>
“Besides black art, there is only automation and mechanization” - Federico García Lorca<br />
<br />
<b>DevOps is not just Automated Configuration</b><br />
If you Google “DevOps”, it seems synonymous with automated configuration tools. Almost everywhere DevOps is driven by the Development team, not the Operations team. While these tools are an important means of achieving Continuous Integration, Continuous Deployment and Continuous Delivery, and they provide a higher level of software quality that gets delivered to the production environment; <u>they do not ensure the other 90% of the DevOps principles.</u><br />
<br />
DevOps is all about <i>breaking barriers, mutual respect, inter department communications, building operations-able software and working as one team with a common goal.</i> In the world of corporate IT, this sounds almost as fictional as “they lived happily ever after” but in the world of SaaS it is a do-or-die principle.<br />
<br />
DevOps tries to bridge between the maverick, out-of-the-box, change-or-die attitude of the Development team and the conservative, no-change policy, if-it-ain’t-broke-don’t-fix-it approach of the Operations team. (<a href="http://saasperspective.blogspot.co.il/2009/08/discipline-or-lack-thereof-and.html" target="_blank">see also</a>)<br />
<br />
DevOps is not a new thing, just a new term. I have been practicing it since 2000 when I was hired by Mercury Managed Services (MMS) to build their US operations group<br />
(As an aside, MMS, now the “HP-SaaS” division following the acquisition of Mercury by HP, was one of the largest SaaS providers at the time, if not the biggest. It was selling around $100M worth of ‘hosted/managed/multi-tenant’ services annually [2004], quietly, without the noise that SFDC was generating at the time)<br />
Back then it meant a highly collaborative effort between R&D and Ops, and a respect by Engineering for the operations team, their practices and the automated tools they developed.<br />
These principles were further forged when I became VP Service Ops in Contactual and then Transera Communications (both SaaS companies in the call center arena) where downtime and degradation of service were devastating for the business.<br />
<br />
<b>The DevOps Components</b><br />
I have written enough about the various aspects of SaaS Service Operations and I don’t intend to repeat it in this post, but I would like to point out the aspects that relate to DevOps <br />
<ul>
<li>Communications & respect</li>
</ul>
Engineering, remember: <u>You have a single customer, and that is the Operations group</u>, so start treating Ops as you would treat a customer; listen to their needs and requests. Schedule a bi-weekly meeting between R&D and Ops at the highest level and discuss issues and plans. Have QA and Support represented as well.<br />
An important aspect of the success of a functioning DevOps undertaking is to build the initial and leading members of the Ops team Ops team from ex software engineers who can speak with R&D at eye level. This will ensure simpler communications and the needed respect from the developers. (<a href="http://saasperspective.blogspot.co.il/2009/11/inter-department-communications.html" target="_blank">see also</a>)<br />
<br />
<ul>
<li>Configuration Management and Virtualization</li>
</ul>
Automation is one of the important principles of a smooth SaaS operation, in order to reduce human error, which is the number one cause of downtime. And replicating environments is a crucial factor to ensure that code that was running smoothly in Dev, in Testing, in Staging will run the same in Production.<br />
So, yes, one does need the virtual servers and the configuration automation tools. There are many of those and different developers swear by their favorite tools. Capistrano, CFEngine, Chef, Puppet, Vagrant, Docker, to name a few, all play an important role in ensuring a smooth transition between environments and reduce human error.<br />
But guess what – things still break down in the production environment, and when that happens, the Operations guys are driving the process and managing the crisis, not the <i style="background-color: white; color: #444444; font-family: arial,sans-serif; font-size: small; font-style: normal; font-variant: normal; letter-spacing: normal; line-height: 16px; text-align: right; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;">ü</i>ber smart R&D guys.<br />
<ul>
<li>Sanctity of the production and Change Management </li>
</ul>
Developers - Lay off! You have no business nor privileges to get near Production. Respect the sanctity of it and respect the Ops teams when they call the shots.<br />
Perhaps the most important aspect of all practices – if you ensure a robust CM process, the probability of downtime diminishes substantially and the recovery should be fast. The development team has to partake in CM. (<a href="http://change%20management/" target="_blank">see also</a>)<br />
<ul>
<li>Incident Management</li>
</ul>
Without detailing the practice, Engineering must be an integral part of the response team, and should have a representative in the real or virtual 'war room'.<br />
<ul>
<li>Product features and architecture</li>
</ul>
Perhaps it is obvious these days that a SaaS product must be built as a highly available and scalable system. And perhaps automatic on-boarding of customers is supported. But what about the other operational-ready features that always get pushed back in favor of the user driven product requests? The list is long, but features should include Instrumentation, Self-serve, De-provisioning Ops-Console, Billing, Dashboards, Customer Notification, Retention policy and Data migration to name a few. (<a href="http://saasperspective.blogspot.co.il/2010/05/saas-vp-operations-as-product-manager.html" target="_blank">see also</a>)<br />
<br />
To conclude, the principles of DevOps should be driving the success of delivering a useful service to the company’s customers, and they are <i>Automation, Communications </i>and <i>Respect</i>.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com4tag:blogger.com,1999:blog-30539899.post-3806201582441176542012-11-28T08:32:00.003-08:002014-06-28T02:50:53.898-07:00IT and the Cloud – the 'Value Paradox'Cloud influence on IT activity and the changing role of the IT manager.<br />
<br />
On Paradox - “If you try to fail, and succeed, which have you done?” ― George Carlin<br />
<br />
<u><b>I know what IT did last summer</b> </u><br />
Since the advent of packaged software , IT staff spent a great deal of their time making software available to their internal customers. What did that entail?<br />
<ul>
<li>Comparing optional vendors and offering</li>
<li>Procurement – negotiating and finally purchasing the software</li>
<li>Designing and customizing the solution</li>
<li>Securing the hardware and installing the software – sometimes this would take months to purchase and install the servers, operating systems and the software.</li>
<li>Testing the environment and the software</li>
<li>Deployment and training</li>
<li>Maintenance – expanding resources, upgrades, etc.</li>
</ul>
All this work revolved just around ‘keeping the lights on’, and IT was usually understaffed with tasks continually piling up.<br />
<br />
While it was crucial to have the software up and running', IT could not devote the necessary attention to derive more value from the application, because just making the application available exhausted what little time and resources IT had at the end of the day.<br />
<br />
<u><b>Shift of Focus</b></u><br />
In the world of SaaS - Cloud applications – many of these tasks are becoming extinct. <br />
<br />
<u>Procurement</u> is done in many organizations by the business manager, and even if IT is involved, the decision is usually made by the Line of Business manager. <br />
<br />
<u>Securing and installing hardware</u> is no longer needed, and neither is installing the software and testing it.<br />
<br />
<u>Maintenance </u>is usually non-existent or negligible as well as <u>deployment</u>.<br />
<br />
<u>Training</u> is also downshifted as most SaaS applications are designed for simplicity and intuitiveness.<br />
<br />
In the Age of Cloud, IT is shifting from <i><b>Managing Software</b></i> to <i><b>Managing Applications</b></i> - As SaaS applications take a larger share of the companies’ portfolio , IT will have less “traditional” tasks, and therefore more time to concentrate on <u><b>bringing value to the business</b></u>. <br />
<br />
What value would that be?<br />
<ul>
<li><b>Performance </b>– a better end-user-experience, understanding when and where and for whom the application is not delivering acceptable response times.</li>
<li><b>Subscription management</b> – save the business unnecessary expenses by ensuring the right number and level of subscriptions were purchased (e.g. don’t continue to pay for employees that have left the company, or don’t pay premium subscriptions for users that are utilizing only the basic functionality)</li>
<li><b>Application utilization</b> – discover usage pattern, optimize the usage, ensure that the applications are being used in the way they were meant to, point out where training may be needed. Know how the application is used, by whom, when and where from.</li>
</ul>
<br />
<u><b>The Value Paradox</b></u><br />
Herein lies the paradox - On one hand, the cloud <u>enables IT</u> to start focusing on the important stuff ( bringing true value to the users and aligning itself with IT), but on the other hand, because of the Cloud’s ‘cloudiness’, <u>IT cannot deliver</u> the benefits since it has no visibility into what’s going on.<br />
<br />
The CIO has a debilitating blind spot when it comes to monitoring Cloud applications. All the communication in SaaS is done between the end user and the service provider. All traffic flows between these end points without IT having any visibility of who is using what, when, from where, how and how much. <br />
There are a number of tools available on the market that, although not designed for this particular challenge, provide partial information on various aspects. They include SSO, Synthetic transactions, APM, License management and log analysis. <br />
<br />
For example, Symantec recently released O3 Gateway while Salesforce is now delivering Identity Force SSO. Both solutions may provide a limited view of some of the knowledge needed.<br />
<br />
Each one of the solutions above can give some visibility into this dark matter, but In order to resolve the “Value Paradox” a new generation of tools will be required and they will need to be simpler, less costly, insightful and better fitting for the SMB market.<br />
<br />
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<br />Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com1tag:blogger.com,1999:blog-30539899.post-44405923102975530522012-08-20T05:21:00.001-07:002014-06-28T02:51:19.607-07:00On Blindness – The Cloud Veil“Living is Easy with Eyes Closed” ― John Lennon<br />
<br />
<b>Cloud is good, but…</b><br />
Perhaps the single most powerful appeal of the Cloud – the ability of business managers to circumvent IT and get immediate IT resources - is also the most problematic aspect of it.<br />
<br />
No wonder there is still a large group of CIOs and IT directors that shudder at the thought of letting go and have the business managers, or anyone in the organization, go out and purchase these resources with a swipe of a plastic card.<br />
<br />
The fact that IT can be bypassed by the process is really neat: It save lots of time, there is zero bureaucracy, it is probably cheaper, and it is available anytime/anywhere. The fact that there is no go-between gives the business users all these advantages but in the same time leads to a <i>debilitating blindness</i>. <br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0xm5qBgOQAL7iPoSUzGXPTrBwp-h6iIr5rBN-keSJZ6SFrBsZMHZCHaZdF3rrd0FyGXESWmm1B15e08N4AVYbjUHc606rQckDdoSixHxM6zvl-fnY45ZNkoCvi57PQncFDEo-uw/s1600/moo.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0xm5qBgOQAL7iPoSUzGXPTrBwp-h6iIr5rBN-keSJZ6SFrBsZMHZCHaZdF3rrd0FyGXESWmm1B15e08N4AVYbjUHc606rQckDdoSixHxM6zvl-fnY45ZNkoCvi57PQncFDEo-uw/s320/moo.jpg" height="240" width="320" /></a></div>
<br />
<br />
<b>What we can’t see</b><br />
Since all communications are done between the end user and service provider, there is zero visibility on the following information:<br />
<ul>
<li>What Cloud resources/applications are being used by the organization? Have various business units subscribed to services without IT’s consent or knowledge?</li>
<li>Who is using what and how much? Perhaps the organization is paying for many subscriptions of employees that have left the company, or simply not using the app? </li>
<li>What modules are being used? Maybe the business is paying for the Unlimited Edition, while most of the users are only using modules of the Basic Edition – the difference can be significant – in some cases ranging from $5 to $350 per user, per month.</li>
<li>What is the user experience like? Are the applications performing as expected? Which browser performs best per given app? Are the services providing similar results in the different office locations?</li>
<li>How are the applications being used? Are all the modules accessed, and if not perhaps training is needed? Are the apps used as expected? E.g. if a CRM is used only between 4-5 PM every day or perhaps once a week, one would suspect that the service is not used as intended. </li>
<li>Compliance – how do we know that we are compliant to the various PCI, HIPPA, GLBA, FISMA requirements if we have no idea how the applications are being provided, or are being used by our employees?</li>
</ul>
Back in the days where all the applications were in-house, on-premise, IT could (in principle) know exactly what systems are running, who is using them, what the performance behavior of a given solution is and how the applications are being used.<br />
<br />
Tools such as Network Sniffing, APM, and log analysis could be deployed in the network and monitor the traffic between the end users and the applications. For services that were offered outside the organization, one could use synthetic transactions to monitor performance and end user experience.<br />
<br />
But what do you do if all the traffic is outside of your reach? How do you know what is really going on? <br />
<br />
<b>Single Sign On </b><br />
Some companies use SSO to give them a measure of visibility into the application usage. While SSO has its merits, it is also limited in a number of ways. First, one must ensure that all employees are using the gateway to access the application. If employees have been using a certain SaaS service for a while, there is no guarantee that they will stop accessing it directly, and in any case, IT may not even know what apps are being used. <br />
<br />
Even if IT manages to enforce the policy that every user in the org, accessing a certain Cloud app, will go through the company’s gateway, (whether from the office, on the road or from home), even then, the knowledge of the usage is limited to the single fact that user 'U' logged on to application 'A' at a certain time. Did that user ever advance from the login page or did she log out immediately afterwards? Did she stay signed in for three days, what modules did she use and at what frequency? What was her user experience? All these questions remain unanswered.<br />
<br />
<b>Service Provider Logs</b><br />
A very small percentage of Service Providers have started making available usage logs for their customers. Potentially, these logs are quite helpful, as they can give a detailed view of the usage of the Cloud resources.<br />
<br />
The drawbacks in this solution are threefold: First, as mentioned, only a small fraction actually does provide such reports, at different levels of detail. Second, each report is formatted differently and therefore, one needs to study each report, try to normalize the data and build a dashboard to capture the information. (bare in mind that some organizations consumes dozens of SaaS apps). Finally, this is simply <u>data</u>. To create actionable, insightful reports will require a huge investment in time, resources and ingenuity that I doubt many IT departments will consider.<br />
<br />
<b>Where is IT?</b><br />
Perhaps in the future, businesses could thrive without an internal IT (just as we make do with power and utilities today). There is a hot discussion going on right now on the various internet forums, as to what shape IT will have (if at all) in the future. But right now and for the foreseeable future, IT is here, and will be needed to resolve a multitude of technical and procedural issues.<br />
<br />
Therefore, even if one is a big believer in Cloud (as I am), IT will need to be involved. At the end of the day, all the problems will be brought to the helpdesk (even if IT was not involved in the process of purchasing and setting up the Cloud apps). Issues of performance, usage, security, compliance and integration will remain in the realm of IT, because the business managers and individual user will not be capable of handling them.<br />
And, therefore, the blindness must be cured. Tools allowing visibility and reports providing actionable insights must be made available.<br />
<br />Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com1tag:blogger.com,1999:blog-30539899.post-26395673399933647552012-07-25T10:43:00.000-07:002014-06-28T02:52:07.452-07:007 Considerations for Transitioning to SaaS“Beware of missing chances; otherwise it may be altogether too late some day” - Franz Liszt<br />
<br />
<b>Not there yet? </b><br />
We are nearing the end of 2012 and there still are thousands of ISVs that have not yet transitioned to the Cloud. For some, the effort might be too big and they fear it will mean an optional death. For others, they might have a steady, captive audience, and their customer base is still strong – perhaps not growing, but enough to sustain them for the short term. What I am certain of, is that <b>no </b>ISV is oblivious to the Cloud revolution, and not thinking of the implications and next steps.<br />
<br />
I have been advising ISVs on this process since 2004 and have developed a program that I implement at my customers who went through the process. Some decided to postpone, others have launched successfully. Following are considerations that are the cornerstone of my methodology.<br />
<br />
<b>1. Motivation</b><br />
There are many compelling reasons to transition from the on-premise model to the Cloud, but many companies do it for the wrong reasons.<br />
I believe that the vast majority of ISVs will transition to SaaS, or cease to exist, so don’t get me wrong – the transition is necessary, but it is also very important for the company to understand why they are doing it. The transition is a Strategic Business Model change, and don’t fool yourself otherwise. <br />
<br />
The fact that <i>Everyone Else is Doing It</i> should pop the questions ‘So What’? Fashion alone is not a reason to change your business model. If you are going to be a ‘me too’ company, or put a little cloud on your logo hoping that it will appease your customers, it will not bring you success. Are you losing your customer base, are your customers demanding a web solution? Are you doing it to capture new markets, new geographies, or expand services within your space? <br />
These questions are critical to define your strategy.<br />
<br />
<b>2. Define Goals. Market and Offering</b><br />
This seems almost too obvious, but one would be surprised at how little this is practiced. At many companies, the drive to offer a SaaS service is driven by a customer request, an initiative of a product manager, or a ‘me too’ attitude. Hence, they decide to play it safe and to first "test the water" by starting the SaaS initiative by offering “something” in order to watch the market’s response. They think that once the motivation is clear, the target market will be better understood, and the offering could be defined. This is a pretty sure fire way not to succeed. <br />
The strategic goals must be defined prior to the transition: Are you reaching out to the same customer base with improved services? Are you reaching out to smaller customers that were previously below the radar? Will you be offering the same product or a simplified version to smaller customers? Could you expand to new geographies that were out of reach because of the previous need to establish costly local operations?<br />
<br />
<b>3. Go-To-Market</b><br />
The go-to-market strategy is very much a derivative of goals, product and target market, but it is important to understand the relationship between them all. Think of the possibilities. Will you be going after your own customer base with the old school, of elephant hunters and wining and dining and 18 months sales cycles? Will you go after a wider audience with inbound marketing and a low-touch approach? Will you place your service on a market place (e.g. AppExchange, ApplicationMarketPlace) with a zero-touch approach? What would be the role of the Channel in the new service?<br />
<br />
These decisions will weigh heavily on the design of the product and most probably on the technology, not to mention the support, sales and marketing functions within the company.<br />
<br />
<b>4. Think outside of the Box</b><br />
SaaS is not just another way to reach a larger market with your existing product – the Cloud offers so many new opportunities that were not possible before. The idea is not just to recreate your client-server application on the web, but use the web as fertile ground for stuff you could not do before. Just think of all the usage data you have now - the ability to understand what your customers are using and how, share that knowledge with the community, or sell the benchmarking data as a service or add features and modules to your service that you were not able to provide before. Since everything is available in the Cloud, you can integrate value added services without the need for a scary, time consuming PS project. <br />
Drive a brainstorming session and ask the employees what they think can can be done in the Cloud. You would be surprised at how many fresh, original ideas will surface.<br />
<br />
<b>5. Understand the Pain</b><br />
As I have written in numerous occasions – the move to SaaS is not expanding through another channel – it is a <u>total paradigm shift</u> and it will affect <u>every silo</u> within the organization. If you do not grasp the enormity of the shift, there is a good chance that you will either fail in the process, or come out on the other side weakened and exhausted. You must understand the effects it will have on every group and the implications, and by "every group" I mean Product, R&D, QA, Support, Marketing, Sales, Finance, Legal, Professional Services and Operations.<br />
If your strategic sessions lead you to conclude that the shift to SaaS is inevitable, you must enhance your chances of success by first understanding the impact, identifying the problem areas and tackling them through buy-in, education and sometimes, yes, the need to let people go. <br />
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<b>6. Spawn Out the Cloud Service</b><br />
Because of the paradigm shift that comes with switching from a <i>product-centric</i> model to a <i>service-centric</i> one, and because it will affect the way things are done in every department, one must consider a near complete separation between the on-premise and SaaS teams. Whether by spawning out a satellite company, or creating a new division, it is necessary for the success of the SaaS offering without trashing the old customer base. Having the same team working on both models, (whether product, engineering, QA, Marketing, Support or Sales), will, at best, make things difficult, create conflict of interest and will risk the success of the new endeavor.<br />
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You should definitely create this new team from your best existing employees and perhaps strengthen it with a few outside recruits. You could begin with a product manager and a small team of young (in spirit) developers, those that thrive on new technology. Challenge them to deliver a new Cloud offering in record time – you would be surprised to find out how much can be achieved in a very short time. (When I started out, over a decade ago, there were so few tools and environments available – one had to build everything from scratch. Now the Cloud provides hosting and eco-systems that allows one to build full-fledged services with billing, integration, monitoring and BI almost out-of-the-box.) Make sure that they report to a C-level in the company that will take this initiative as a personal goal.<br />
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<b>7. Vision & Leadership</b><br />
There are numerous examples of companies that succeeded in the transition, despite the hardships and challenges. (Concur being the ultimate example) The common thread was the executive leadership's belief that they are doing the right thing and their ability to carry their enthusiasm to their employees.<br />
There are also quite a few examples of companies that failed in the process. Some of them paid dearly for that move (Mercado as an example of a very promising company that depleted itself through the process, and basically evaporated). I believe that the common trait of these failures was a lack of leadership and/or understanding of the managerial and strategic resources needed for the transition. Either the process was carried out by an enthusiastic director who got a mandate to "test out the water" as a sideline project, or that the Sales team stepped in and bungled the attempt as they perceived it contrary to their agenda, or the company tried to run both models in parallel with the same teams.<br />
It is not enough that the CEO believes in the model. She must make sure that the board of directors is behind her and that every C-level is on the team, understands the issues, the opportunities and the difficulties, and propagates the enthusiasm all the way down to the entry-level employee. Bring the sales team on-board at an early stage and get them excited. They have the most to lose in the short term and they can be a royal pain in the backside if they chose to.<br />
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And yes, listen to your customers – one of the downsides of on-premise software is that you don’t <i>really</i> know if and how your software is being used.<br />
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There is a lot of misunderstanding about Cloud; too much hype has been thrown around. It is important to educate the staff and create a <i>common vocabulary</i>, to facilitate effective discussions in the board room and next to the coffee machine. Make sure that the most junior level worker has a clear understanding of the goals and the path to achieve them and get them excited about the prospects.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-64725180839009887412012-04-12T09:26:00.000-07:002014-06-28T02:56:51.624-07:00All the Right Reasons for not adopting the Cloud (Scientifically speaking, of course)“Just as no one can be forced into belief, so no one can be forced into unbelief” - Sigmund Freud<br />
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Last week I participated in an expert-panel in a Cloud-meeting for CIOs. The conference started with an hour long CIO panel, then the vendors displayed their goods and finally, the expert panel.<br />
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What was obvious, was that different CIOs had completely differing opinions on whether Cloud should be embraced or not. There were those that were completely for Cloud and were actively seeking how to consume more Cloud services while others explained why the idea was mostly ludicrous. <br />
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When asked to summarize my impression of the meeting, my observation was that the difference in attitude towards embracing Cloud and SaaS had nothing to do with the size, or business or type of enterprise these CIOs were representing, but with the psychological makeup of the CIO.<br />
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<b>Perfect Reasoning</b><br />
If you are for the Cloud, then the TCO and ROI clearly indicate that Cloud is the logical choice. If you are against the Cloud, you could prove how it ends up being more expensive.<br />
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If you do not want to adopt SaaS you can always pull out the regulatory winning card.<br />
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If you are for Cloud, you can talk about the flexibility of using SaaS. If you are against, you talk about how inflexible SaaS is without the ability to customize.<br />
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If you are a SaaS seeker, you tell the audience how much better the security of SaaS providers was than your own facility, but if you feel threatened by SaaS, you bring up those horror stories to justify not going there.<br />
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<b>Que Sera Sera</b><br />
I have no doubt that the train has left the station and that the old-school CIOs will, with time, become a minority. But then, you still hear some scientists arguing that Global Warming is fiction and they have scientific proof.<br />
I don’t know what the future will look like, and what trends will dominate a decade from now, but Cloud is here to stay. Mind you, there are still mainframes running business on COBOL code, forty years later, so one would assume that on-premise will still be around in one way or another.<br />
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But as for the arguments, like religion, faith and whether the Sun revolves around Earth, no “scientific proof” will be able to change people’s minds.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-10504579360240038622012-03-06T07:10:00.000-08:002014-06-28T02:53:30.054-07:00Give me Freedom – Give me SaaS<span id="internal-source-marker_0.7219223322459638" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><span style="background-color: transparent; color: black; font-family: Verdana; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">“You can have peace. Or you can have freedom. Don't ever count on having both at once” - Robert A. Heinlein</span><a href="http://www.brainyquote.com/quotes/quotes/r/robertahe137033.html"><span style="background-color: transparent; color: #1155cc; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span></a><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"><b>I really like LinkedIn.</b> </span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">[ I dabbled with Facebook for a little while, but truth be told, I gave it up. Even though I know that every company that respects itself has a presence there, it still feels a little silly to share my professional views on a social network where my kids exchange juvenile videos, girlfriend status or tomatoes on Farmville.]</span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">The professional groups on LinkedIn can generate very lively discussions on things that matter to their members. Recently, I participated in a comment-war-of-attrition (over 50 extensive comments) on one of the larger CIO groups on LinkedIn. The origin of the discussion was a simple question of how to evaluate SaaS vendors, but the discussion quickly shifted to the concept of SaaS and then to the idea that <u>SaaS limits the freedom of the CIO</u>.</span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; vertical-align: baseline;"><b>Lack of Freedom?</b></span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">One of the participants was especially passionate against SaaS and kept talking about the idea that SaaS takes away your freedom because of vendor lock-in, because there is no control over the servers and the application and because there was no option to customize the software. Another point was that SaaS was totally dependent on the Internet to function (my refrigerator is totally dependent on the electric grid; is that a reason not to buy one? I find it hard to believe that any modern business is NOT dependent on the internet whether it has SaaS or not).</span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; vertical-align: baseline;"><b>It’s</b> <b>not about IT and it’s not about the</b> <b>CIO</b></span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">Let’s examine the kinds of freedom that this CIO is talking about. Owning and maintaining your own hardware. Wow! You have the <u><i>freedom </i>to research, negotiate, purchase, rack, stack, connect, test, maintain and upgrade</u>. Yea! Are your users in HR thrilled about that? Are they applauding the efforts and wonderful results? Does all that effort get them closer to a solution or is it a justification for the IT budget?</span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">IT has the <u><i>freedom </i>to research, purchase, install, test, integrate, maintain and upgrade the software package</u>. Yea again! It did take nine months to get here, but guess what? we have our own software! <br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">The Sales department might ask you why couldn’t we have done that nine months ago, using a SaaS solution, <i>but' heck, what do they understand about IT’s needs</i>. Oh yes, forget about the new versions that came out since – now we have the <u><i>freedom</i> NOT to upgrade</u> (actually, we are scared s**tless about touching production after finally stabilizing the system).</span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> </span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">I believe that the freedom the CIO was talking about was mostly about the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline;">freedom to stay in charge</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline;"> </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">and have the business units dependent on IT.</span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">[</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">I do agree that in some cases, maintaining control of on-premise software has merit or it is governed by regulations; but that should be the exception, not the rule.]</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> </span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; vertical-align: baseline;"><b>Freedom to Customize</b></span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; vertical-align: baseline;"></span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">But, aha, IT will say, we have the <u><i>freedom </i>to customize the application</u> to our heart's content. We own it! We can do whatever we want with it. But do we really want to customize the application? Is our hospital so different than thousands of other hospitals that our WFM software must be customized to our specific needs? Would customizing the Travel Expenses software give our bank the market edge?</span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">SaaS applications embody the best practices of hundreds or thousands of robust businesses that share 90% of the business processes. Most solid SaaS applications provide a level of configuration that should take care of an extra 5% of specific business processes.</span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">On any day, nine out of ten business managers will prefer to have a working solution </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline;">today</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> that does 95% of the work, rather than <b>wait twelve months</b> for characterizing, prioritizing, designing, coding, testing and installing a solution that provides the 100%.</span><br />
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; vertical-align: baseline;"><b>Real Freedom</b></span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline;"></span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">SaaS gives IT and the business:</span><br />
<ul>
<li style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">Freedom from hardware purchases</span></li>
<li style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">Freedom from racking, stacking, configuring, installing.</span></li>
<li style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">Freedom from the endless maintenance and firefighting</span></li>
<li style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">Freedom from the upgrade nightmares</span></li>
<li style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">Freedom to choose – SaaS almost always gives you free trials to play with before you make the heavy commitment</span></li>
<li style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> Freedom to change your mind - if you are not happy, you can switch (yes, I know it is not simple, but at least in early stages you can do it with minimal damage while with on-premise software you are stuck with your decision for years)</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> </span></li>
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</style> <![endif]--><span style="color: black; font-family: "Arial","sans-serif"; font-size: 11.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: HE; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">And that means freedom from long-term, substantial, financial commitments</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> </span></li>
<li style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">And finally, Freedom to say NO to the business units that absolutely insist on that extra feature that will be forgotten by the time it is implemented</span></li>
</ul>
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">I am surprised that in 2012 we are still having these discussions, but apparently the veteran CIOs are still around fighting to maintain the old world order (see my previous post on <a href="http://saasperspective.blogspot.com/2012/02/occupy-it-cloud-and-democratization-of.html" target="_blank">Democratization of IT</a>).</span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> </span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span>Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com1tag:blogger.com,1999:blog-30539899.post-2159510637002935522012-02-11T05:19:00.000-08:002014-06-28T02:54:22.940-07:00Occupy the Server Room! – The Cloud and Democratization of IT“The best argument against democracy is a five-minute conversation with the average voter" -Winston Churchill<br />
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<i>(Based on a presentation I gave last week at the annual IASEI conference. The presentation was a segue to a CIO panel that I moderated in which the CIOs discussed how they are dealing with the changes in IT)</i><br />
<br />
I have been following with awe the events this past year from Tahrir Square in Cairo to downtown Manhattan and other Arab and Western capitals across the world. The message is clear –<u> there is too much power for too long in the hands of too few.</u> The masses want to decide what’s good for them and not let a small group of (revolutionary generals / self-appointed businessmen / grand ayatollahs) have control over various aspects of their lives.<br />
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It seemed obvious to me that the same phenomena is happening in the corporate world. I am not sure we will soon see the employees storming the CIO’s office with torches and pitchforks, but the distribution of control from IT to the business units and to the individual workers is a trend that cannot be reversed. It is a result (and driver) of three other trends that have been as relentless: <br />
<ul>
<li>Consumerization of IT</li>
<li>Commoditization of IT</li>
<li>Democratization of Information</li>
</ul>
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<b>The Great Democtator</b><br />
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Like benevolent rulers that know what is good for their subjects, IT managers decided what was good for the organization, what technologies would serve the people and have traditionally held all the cards close to the chest. The more complicated the world of information became, the more dependent the business units and employees were on information technology, the more power IT had and the bigger the budget.<br />
And like any society ruled by a single central power, dissent is inevitable and, with time, the more you try to control the elements, the more people will try to break from your hold.<br />
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<b>IT as a Technology Broker</b><br />
Not so long ago, an employee needed the IT department to do almost anything that touched technology in one way or another. IT was a broker of hardware, of solutions and of information.<br />
Remember the Wang 1200? It was a big machine that needed its own office space and an operator to run. What did it do? Word Processing! Imagine that you needed IT's help to write a document.<br />
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<ul>
<li>You needed a phone? IT would pull a land line to your desk and install the connection, then bring the device (which took them months of research and testing to decide on what model is right for you) configure the phone and configure the setting in the PBX. Nowadays you just use your mobile phone and ask IT to pick up the bill.</li>
</ul>
<ul>
<li>You needed a CRM to support your business process? IT would spend months researching and testing different packages and negotiating a price. Then IT would need to purchase and install the servers (sometimes the DB licenses as well) and that could have taken months as well. Then IT would spend time on installation and testing and perhaps customizing and integration. All this means that you could not have done it without IT’s crucial role. These days you would subscribe to a SaaS CRM and try a free trial.</li>
</ul>
<ul>
<li>Your hard drive got fried? IT will try to revive it. If a few days later they are unsuccessful, you will be issued another disk and IT will install it on your desktop and reconstruct from the backup tapes (they’re in Nebraska) at least some of the files so you could get back to work within a few days.Today, you open your Smartphone and pull up those files from DropBox.</li>
</ul>
The point being that Cloud has eroded a large part of the need for IT to act as a technology broker. Many of the resources they used to control in the past are now a mouse click away.<br />
<b><br />
Reversed Trends</b><br />
Once upon a time, most of the technological breakthroughs and innovation would come out of the defense industries, the military and NASA. Years later they would make their way into the major corporations until finally, we mortals would see the expensive gadgets in the store. Remember the Casio digital watches, the TI calculators and early GPS systems?<br />
Well, the trend has clearly been reversed. Most of the new innovations are directed at the end user – the consumer: Instant messaging, search engines, blogging, Wiki, web search, polling, social networks and twitter. All these technologies made their way into the corporate world after becoming popular and useful for the general consumer population.<br />
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<b>A Historical Perspective</b><br />
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<u><i>Switch from 2nd to 3rd Gen Languages</i></u><br />
It is common to think that the revolution began with the PC, but I believe that the seeds were planted when the third generation programming languages became available (FORTRAN, COBOL, BASIC, C). This enabled tens of thousands, then hundreds of Ks, of geeks around the world to join the exclusive club of perhaps a few thousand programmers that controlled the tech world thus far, and with the advent of the PC, they could do it outside the stranglehold of the large corporations. I think of it as the <i>Magna Carta</i> of the IT Democratization process.<br />
<br />
<u><i>Personal Computers</i></u><br />
First there were the PCs that marked the beginning of democratization. Heavens forbid, people could actually play solitaire at work without IT doing anything about it! And then, when the affordable PCs at home offered them more freedom, they started installing all kinds of software on their work desk tops using those damned floppies to get stuff around. PCs meant that geeks could sit at home and develop cool stuff without the monstrous budgets needed till then.<br />
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<br />
<u><i>Internet</i></u><br />
Then came the internet and with it so many possibilities. Do you still remember the days when IT blocked internet access or limited it to only a few pre-defined sites? Heck, there are many financial institutions that still today do not issue email accounts to their employees; if you really need something done the employees have to use their private Gmail or Yahoo mail accounts.<br />
<br />
The internet also enabled the <i><u>Democratization of information:</u></i><br />
WikiThis, WikiThat, how-to sites; the internet enabled crowd-sourcing, so that you no longer needed in-house developers or testers to do the work, and there is less need for IT experts to help you out.<br />
Social networks and evaluation sites let everyone ‘like’ or ‘dislike’ your products and services, so one cannot hide behind the great firewall any longer. No longer are you dependent on IT to get the technical information. The fact that IT would probably do a better job and will be able to sift through the information more intelligently is irrelevant. The business managers have access to the information and it gives them a sense of freedom they never had before; “Power to the People!”<br />
And, of course, Open Source software which would have been impossible without the Web. Isn't that the ultimate manifestation of Democracy?<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgs9eORYqNRKw0NJQBMgnqvp84zDceGS-4gyiAq1U0ab1qRjFuYAW1bUw_K4psTZPuMhgsOYsfx2cJVXt2O6gk5Oo9f6pd2XiMaIKMvMTJ3ycD9P-C-5rRXRTM-ewYehCrfziN74A/s1600/OpenS.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgs9eORYqNRKw0NJQBMgnqvp84zDceGS-4gyiAq1U0ab1qRjFuYAW1bUw_K4psTZPuMhgsOYsfx2cJVXt2O6gk5Oo9f6pd2XiMaIKMvMTJ3ycD9P-C-5rRXRTM-ewYehCrfziN74A/s1600/OpenS.png" /></a></div>
<br />
<u><i><br />
Mobile Computing</i></u><br />
Anytime – Anywhere – Anyhow. As much as IT tried to resist it at first, PDAs, Blackberries and then Smartphone and Pads became the standard and every CIO had to deal with implications. What apps should be installed on the mobile devices, what kind of access do you allow from the device to the corporate systems, how do you synchronize and protect the data?<br />
<br />
<u><i>Cloud</i></u><br />
<u><i><br />
</i></u><br />
<a href="http://b.dryicons.com/images/icon_sets/blue_velvet/png/48x48/fast_forward.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="Fast Forward Icon in 48x48 px" border="0" src="http://b.dryicons.com/images/icon_sets/blue_velvet/png/48x48/fast_forward.png" /></a>And then along came Cloud, which is a big nail in the IT Control coffin. <br />
The Cloud became a catalyst of all the above trends. Everything shifted to Fast-Forward.<br />
<u><i> </i></u><br />
The Cloud drove the Commoditization of IT – for most purposes a server is a server is a server. And with virtualization, no one knows and, frankly, no one cares. Gimme computing power, storage and bandwidth, and let the geeks fight the acronym battles amongst themselves.<br />
On the one hand, anybody in the organization could go out and consume IT services without the CIO being involved. Be it a server, storage, backup, development environment or a full enterprise application, it was only a credit card swipe away – and half the stuff out there is free anyway, or available as a free trial.<br />
On the other hand, any three guys and a goldfish with a great idea, (even if they reside in a third world country) can easily get a full development or production environment up and running and sell their services to the world.<br />
<b><br />
Impact on the CIO?</b><br />
There are good sides to this trend, even from the perspective of the CIO.<br />
Cloud liberates the IT group from a lot of the menial work they are engaged with – wiring, installing, testing, maintaining, upgrading… Imagine all this disappearing overnight. IT can switch from firefighting mode to strategic planning, from a cost center to a value center. The CIO can metaphorically crawl out from under the desk, where he was busy connecting wires, and join the executives’ strategic discussion over the desk.<br />
<br />
But the democratization of IT is introducing many headaches to those in charge of technology in the enterprise:<br />
<ul>
<li>Lack of visibility – who is using what, when, from where and how long? All that information is now in the hands of the service provider.</li>
<li>Utilization of the Cloud resources – while moving to the Cloud many have been a substantial cost saving, it may end up being expensive if you do not know what resources are being utilized in the Cloud.</li>
<li>Lack of uniformity – each department or individual employee can access resources without the intervention of IT. </li>
<li>No control over performance or SLA adherence </li>
<li>Support of multiple mobile platforms that is very dynamic:</li>
<li><ul>
<li> </li>
</ul>
<ul>
<li>Unknown patched state </li>
<li>Unknown application vendors</li>
<li>Unknown application compatibility</li>
<li>Complexity to access corporate data</li>
</ul>
</li>
</ul>
<ul>
<li>Security (Access Management, Theft ,Privacy)</li>
<li>Corporate and government regulatory compliance</li>
<li>Intellectual property protection</li>
<li>Integration with legacy and with Cloud application</li>
<li>Subscription utilization – ROI</li>
</ul>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpkNAudx8BMPYTqCMe8n3yYJhr3apKNJ6AmPp-VqQna2mtrLbik9962pWlj2OcvhZ7U9w1yttLm1KLO9ds59zN3taIU4_xU3jk4LIOTr_ZQHFMVWIoExWkrXd-K8apxbPiLo9HeQ/s1600/Whattodo.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpkNAudx8BMPYTqCMe8n3yYJhr3apKNJ6AmPp-VqQna2mtrLbik9962pWlj2OcvhZ7U9w1yttLm1KLO9ds59zN3taIU4_xU3jk4LIOTr_ZQHFMVWIoExWkrXd-K8apxbPiLo9HeQ/s320/Whattodo.jpg" height="320" width="221" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">What to do!?</td></tr>
</tbody></table>
<br />
<b>Bring Down the Wall</b><br />
IT has enough issues to deal with just maintaining the on-premise IT resources. Faced with the enormity of the challenges, the initial instinct is to shut down all access from the outside world. Think of the last days of a dictator hiding in his castle, living in denial. But the reality is that the CIO has to embrace the trend, not fight it. Democracy is here to stay since there is so much for the employees (and therefore the enterprise) to lose if we rewind and return to where we were a decade ago.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com2tag:blogger.com,1999:blog-30539899.post-20900815807288626862011-12-12T08:12:00.000-08:002014-06-28T02:56:02.476-07:00Implementing SaaS Solutions Reduces Security Concerns<b style="-webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; background-color: #4588f0; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 13px; font-style: normal; font-variant: normal; letter-spacing: normal; line-height: 19px; orphans: 2; text-align: -webkit-auto; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px;"></b>"The user's going to pick dancing pigs over security every time" - Bruce Schneier"<br />
<br />
In this post I am publishing an article by a guest contributor - <a href="http://www.linkedin.com/pub/rashed-khan/2b/956/218" target="_blank">Rashed Khan</a> (<a href="mailto:rashed.khan@searchlaboratory.com"><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves/> <w:TrackFormatting/> <w:PunctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:DoNotPromoteQF/> <w:LidThemeOther>EN-US</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>HE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> <w:SplitPgBreakAndParaMark/> <w:DontVertAlignCellWithSp/> <w:DontBreakConstrainedForcedTables/> <w:DontVertAlignInTxbx/> <w:Word11KerningPairs/> <w:CachedColBalance/> </w:Compatibility> <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel> <m:mathPr> <m:mathFont m:val="Cambria Math"/> <m:brkBin m:val="before"/> <m:brkBinSub m:val="--"/> <m:smallFrac m:val="off"/> <m:dispDef/> <m:lMargin m:val="0"/> <m:rMargin m:val="0"/> <m:defJc m:val="centerGroup"/> <m:wrapIndent m:val="1440"/> <m:intLim m:val="subSup"/> <m:naryLim m:val="undOvr"/> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
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</style> <![endif]--><span lang="EN-GB" style="color: #1f497d; font-family: "Calibri","sans-serif"; font-size: 11.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: HE; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"></span></a><a href="mailto:rash799@hotmail.com">rash799@hotmail.com</a>) who points out interesting study results...<br />
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Software as a service (SaaS) for application delivery is a hot topic when it comes to questions of security. Adding SaaS components in any form is something that seems to generate acute anxiety in anyone who takes the time to consider it. Fears about the loss of privacy and other related security issues top the list of current concerns. <br />
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On the other hand, those who are already using SaaS solutions or have added elements of SaaS to their systems are considerably more confident about security issues than non-users. When it comes right down to it, SaaS appears to be something that one must experience in order to trust. <br />
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Forrester Research has recently completed a study that supports this premise. In companies where SaaS was already in use, having replaced a complete solution, concerns over security are noticeably lessened. This is also true in companies where the decision to replace a complete solution with SaaS had already been made and was about to be implemented. <br />
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By contrast, companies that were only contemplating or planning to augment their solutions with SaaS, or in companies that were using just a few SaaS components, anxieties over safety were still running high. <br />
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Miroslaw Lisserman, analyst at Forrester Research, believes this to be a strong validation of the future of SaaS technology. Lisserman had this to say about the findings: “To me, this means the following: SaaS solutions are more secure than perceived by many, since once SaaS applications are deployed and used, the security concerns decrease.” Apparently, SaaS technology performs so well that it has to be experienced to be believed. <br />
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Analyst Krishnan Subramanian, an independent researcher, feels that the security concerns related to the SaaS technology itself have been overworked. He said that the real issue related to this application has more to do with people. Regarding these concerns, Subramanian had this to say: “It is the responsibility of the SaaS vendors to educate users about their people-centric security practices. It is the responsibility of the SaaS users to get to know these details from the vendors.”<br />
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Moving away from concerns about the security of SaaS technology and turning attention instead to security concerns related to the technology's providers and users is a measure of the maturing of this technology. It's a sign that SaaS is ultimately coming into its own. <br />
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The growth of the sector itself testifies to this belief. There has been rapid expansion of SaaS solutions with Enterprise Resource Planning (ERP) software functions. Additionally, there is growing use of the ERP system by both small and mid-sized manufacturers. The <a href="http://www.epicor.com/australia/industries/Manufacturing/Pages/Manufacturing.aspx" target="_blank">manufacturing software</a> is also used more frequently by industry distributors and in job shops. <br />
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Small companies who are part of large supply chains, along with the supply chain members they deal with, are all discovering significant benefits and greater functionality in SaaS-based <a href="http://www.epicor.com/australia/Pages/Default.aspx" target="_blank">ERP</a> when employed as a comprehensive manufacturing software solution. Home-grown and standalone applications fall short by comparison, making SaaS both the wave of the future and an increasingly intelligent choice.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com1tag:blogger.com,1999:blog-30539899.post-51620446750629768812011-12-01T05:33:00.001-08:002014-06-28T02:57:18.720-07:00The Black Swan Event in SaaS Operations "I find that the harder I work the more luck I seem to have." - Thomas Jefferson<br />
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Nassim Taleb’s eye-opening books <i>'Black Swan</i>' and (to a lesser extent) <i>'Fooled by Randomness</i>' discuss the rare, unexpected and almost impossible to predict events that have a major impact (and usually tend to be disastrous). He calls these events Black Swan events, and gives samples such as World War I, stock market crashes, the PC, the Internet, and 9/11.<br />
Interestingly enough, all the Black Swan events are easily rationalized after the event, by hindsight.<br />
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The Black Swan analogy is borrowed from the notion that while one can induce a hypothesis from observational data - e.g. all swans are white - one cannot prove that hypothesis, since after observing numerous white swans, it takes only a single black swan to refute it. Karl Popper, the science philosopher, made that notion popular in his discussion of the Scientific Method (<a href="http://books.google.com/books/about/The_logic_of_scientific_discovery.html?id=Yq6xeupNStMC" target="_blank"><i></i></a><i><a href="http://www.blogger.com/post-edit.g?blogID=30539899&postID=5162044675062976881" title="The Logic of Scientific Discovery">The Logic of Scientific Discovery</a></i>). <br />
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<b>SaaS and the Black Swan</b><br />
Have you ever lost your database only to find out that the backup files were deleted the previous day? Have you ever hit a major problem with a component in the system, only to find out that the support contract expired last month?<br />
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My own experience and the experience of the numerous companies I have worked with, have taught me that the next Black Swan is just around the corner, lurking in the dark and will hit you when you least expect it to. Heck, that’s the nature of a Black Swan.<br />
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The systems we deal with are so complex and interdependent that one could never analyze (let alone predict) the interconnections that govern the behavior of the services we offer. Luckily, statistics are on our side, so that most SaaS applications are stable most of the time and on average, we can predict the behavior over time. But that is just what creates a Black Swan – we observe a certain behavior for so long, that we tend to accept it as a scientific fact; until it bites us in the behind.<br />
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Running a complex SaaS operation with dozens (or hundreds) of servers, network boxes, configuration files, erratic software and all the dependencies we have on our infrastructure providers (power, internet, hardware, communications) is like driving a high speed car on a congested highway, blindfolded. We have no appreciation of how much Lady Luck is involved.<br />
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Keep in mind that the longer good things happen, the harder is the effect of the Black Swan event - remember the dot.com and the real-estate bubbles; most of us are still licking the wounds.<br />
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<b>The Butterfly Effect </b><br />
All it takes is an overflowing log file, that incapacitates the disk, that will bring the system down. Or a minor, forgotten gadget installed on one of the servers whose license has expired. A pipeline of requests starts filling up and there goes the system. <br />
How about setting up an image of a new VM, whose IP and the DNS IP were reversed by mistake. Put it in production and slowly the wrong DNS IP starts propagating in the system. After a while the servers are not communicating with each other and the system freezes. <br />
These tend to be catastrophic events, since they are so hard to detect and resolve. Many times, restarting the whole system is the chosen quick solution, praying that the problem will resolve itself. But in these cases, the system will behave just as badly, and by the time one realizes what is happening, major damage to the customers and your brand has been done.<br />
<b><br />
Words of Wisdom</b><br />
Do not despair. I am not suggesting that since a Black Swan event is unpredictable, there’s nothing you can do about it. The opposite is true.<br />
The first step is to internalize the fact that<u> it will occur</u>, as the famous quote goes “s**t happens”.<br />
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“<i>Prepare for Failure</i>” is my motto. Take into account that at any given moment something might break.<br />
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A number of practices should be implemented early on:<br />
<u>Change Management</u>: To ensure that the events are indeed rare and that one may recover quickly with the knowledge of what went wrong.<br />
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<u>Event Management</u>: To be able to detect early on, what is hitting the fan, and respond to it. <br />
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<u>Availability Management</u>: Analyze your Single Points of Failure and impact of component failure. Build your backups, your DRP and practice recovery.<br />
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<u>Incident Management</u>: Make sure you cover these practices: Detection, Recording, Classification, Notification, Escalation, Investigation, Diagnosis, Restoration and Closure.<br />
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</b><br />
<b>The Wise and the Smart ones</b><br />
I was approached by a few (emphasis on few) CEOs and COOs that felt uncomfortable about the fact <i>everything was going smoothly</i>. Some were on the verge of fast growth and wanted to assure themselves that they were better prepared to hit the highway. Others had a feeling in their bones that “too good for too long” was a recipe for disaster, even if they did not read Nasssim Taleb’s book.<br />
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But many potential customers I spoke with assured me that they really do not need my services since they are doing very well, thank you. Some are still doing very well and others had a large hat to eat and many letters of regret to write their customers.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com1tag:blogger.com,1999:blog-30539899.post-38262137393590533652011-10-03T10:32:00.000-07:002014-06-28T02:57:46.792-07:00CAC, LTV, MRR - Translating SaaS Financials into Actions“If people do not believe that mathematics is simple, it is only because they do not realize how complicated life is.” - John Louis von Neumann<br />
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I’m sure that most of you have seen the various metrics floating around with CMRR, CLTV, Churn Rate and ASC starring in equations that sometimes cause one to cringe while sipping the day’s first coffee.<br />
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Let’s look at one of the basic formulas for SaaS Financials:<br />
<b>CAC < CLTV</b><br />
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This simply says that if you want to become profitable one day, you must make sure that your <b>Customer Acquisition Costs</b> should be less than your <b>Customer Lifetime Value</b>. In other words, the total amount of revenue you will generate from a customer, throughout the years or months that they derive value from your SaaS offering, should be more than the cash you spend on acquiring that customer.<br />
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Simple? It almost doesn’t pass the DUH Test. But in this article we'll look more carefully at the implications.<br />
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<b>Acquisition vs. Retention</b><br />
There is a notion in the industry that <u>the costs to acquire a new customer are 5 to 7 times more expensive than the costs to retain an existing customer</u>. Whether one agrees with the numbers or not, it is widely accepted that acquisition is more expensive than retention, <u>yet most SaaS companies will spend far more resources and executive attention on growth through new customers than keeping the current customers satisfied,</u> or in other words, reducing the Churn and up-selling to the current base. In fact, in every company I have consulted, the issues of Churn Management and Operational Excellence were far down on the priority list.<br />
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I guess <i>hunting </i>is far more exciting than <i>farming</i>.<br />
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Therefore, we will examine on how to grow the right hand side of the equation - the CLTV, not on how to lower the left side - the CAC.<br />
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<b>Breaking down the CLTV</b><br />
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</b><br />
CLTV = Lifetime * ARPU * Gross Margin.<br />
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I hope I am not losing you here. Take another sip from your Latte. It is not complicated – sixth grade math. Stick with me, the actionable items will follow shortly.<br />
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ARPU means the ‘Average Revenue Per User’ for the time period defined as Lifetime. So if you count by months, Lifetime would be the number of months the customer remains loyal, and the ARPU would be the average that the customer would pay per month. If your value is calculated by years (lucky bastard!) then Lifetime would be how many years you retain the customer and the ARPU is average revenue per year from the customer.<br />
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Gross Margin is the ratio of total Revenue to the Costs Of Goods Sold (COGS) – how much does it cost you to give service to your customer.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCv2FyxoY967lknnqBJxDre8reEhnBiRKyZAkjUYOT6gBoXo4-AZYrnfl_0YF-sL0q1r_tvwq_E24BjIzdTf5FIcKdMflMcY-PHk27peoG90eW4gkN8U0hRzbSKTEN3NI6p2lUFQ/s1600/grossmargin.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCv2FyxoY967lknnqBJxDre8reEhnBiRKyZAkjUYOT6gBoXo4-AZYrnfl_0YF-sL0q1r_tvwq_E24BjIzdTf5FIcKdMflMcY-PHk27peoG90eW4gkN8U0hRzbSKTEN3NI6p2lUFQ/s1600/grossmargin.jpg" /></a></div>
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For the Gross Margin to grow, the COGS should shrink, or at least stay stable as your revenue grows. So the lower the COGS are, the more you retain for your Christmas party.<br />
As a simple example, let’s assume that your average customer sticks around for 19 months, that the average monthly payment from a customer is $430 and that your gross margins are 72%, then the CLTV = 19 * $430 * 0.72 = $5882.4.<br />
Just imagine that with a little effort you could cause the Lifetime to grow to 21, or<i> </i>the ARPU to $460 and multiply the new CLTV by the number of customers...<br />
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<b>What can we do about it?</b><br />
Without going into details of how the various numbers are calculated we can still learn much about these equations and derive actions from them.<br />
The bottom line is that you want to have the highest CLTV value possible. Looking at the equation, it means that your <i>Lifetime, Gross Margin </i>and <i>ARPU</i> values should grow.<br />
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Needless to say that for each of these three values, books could be written. Nevertheless, the paragraphs below cover the main points and map the actions one can take, and their direct impact on the equation’s variables.<br />
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<b>Lifetime </b><br />
In order for this value to grow, a SaaS provider should invest managerial attention into customer retention, or lower Churn. That means improving your customer service and responsiveness. Meassure and monitor the support KPIs. Run a weekly Customer Success meeting with Support, Operations, Sales and PS. Build a community and best practices around your product to enhance loyalty.<br />
Be as transparent with your service levels as you can. Award loyalty with small gifts. Document your Churn data and analyze it – understand the reasons customers leave you and determine the trends.<br />
Provide meaningful SLAs and act on them.<br />
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<b>Average Revenue Per User</b><br />
Translate ARPU into: “up-selling you service”. This means a strong group of <i>farmers </i>in your sales team. Use software to monitor user behavior. Think of value-added services that you could sell for a fraction of the recurring cost. Identify and keep in touch with your champion inside the customer’s organization and seek opportunities to sell more services or branch out to new groups within the organization.<br />
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<b>Gross Margin</b><br />
Lowering COGS means an effective and efficient Service Operations. This starts with a good team of dedicated professionals, a rigorous set of practices such as Change Mgmt, Incident Mgmt, Event Mgmt, etc. and a robust monitoring and alerts infrastructure.<br />
Automation and Delegation - maximize what silicon and your customers can do instead of having people on your end doing it. That means create as much automation as possible around manual processes. Provide self-help, self-registration and self-configuration for your customers to run.<br />
Understand the financials of the hosting services you are using. Don’t stick to the current solution just because you have been doing it for a long time. Circumstances would have changed, new solutions are offered every month, and a fresh look might save a lot of recurring costs.<br />
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In conclusion, we looked at one of the equations that every venture capitalist (i.e. your board members) tells you to watch, and transformed it into actionable items that your company should deal with. To pass that threshold of profitability, it probably won’t happen with that “major deal we’re about to sign”, but with improvements across the board in every aspect that tilts the right side of the equation.<br />
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For some good readings on SaaS Financials there are <a href="http://www.bvp.com/saas/default.aspx">Bessemer’s 5 Cs</a>, and Joel York’s excellent articles on the <a href="http://chaotic-flow.com/saas-metrics-guide-to-saas-financial-performance/">financials of SaaS</a>.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com0tag:blogger.com,1999:blog-30539899.post-2598939246912003692011-08-21T23:20:00.000-07:002014-06-28T03:01:56.171-07:00SaaS and SLA - State of the Art"You can get assent to almost any proposition so long as you are not going to do anything about it." (Chapman, John Jay)<br />
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Lately, I have been approached by a number of frustrated CIOs, asking me about what can be expected from a typical SLA in the industry and which provider offers an SLA with some beef.<br />
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<b>A Typical SLA</b><br />
Let’s see what a basic SaaS SLA <i><u>should </u></i>look like:<br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>Service Availability </i><br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>System Response Time </i><br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>Customer Service Response Time </i><br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>Customer Service Availability </i><br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>Service Outage Resolution Time </i><br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>Failover Window For Disaster Recovery </i><br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>Reclaiming Customer Data </i><br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>Maintenance Notification </i><br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>Proactive Service Outage Notification </i><br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>RFO (Reason for Outage) </i><br />
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Nice. Now let’s see what a <i><u>typical</u></i> SLA in the SaaS industry looks like:<br />
<i>•<span class="Apple-tab-span" style="white-space: pre;"> </span>Service Availability </i><br />
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Is that it? Yeah, that’s about it. (Sometimes you may find <i>Customer Support response time</i> as well, the Lord be praised). The standard SLA in the industry only discusses ‘uptime’ and even that is usually very iffy, with mostly zero or negligible penalties.<br />
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Recently I have been meeting with CXOs of successful SaaS companies and asking them what their SLAs offer. Not surprisingly, their answers were reflective of the typical SLA above. Some did not even offer an SLA and one said, half jokingly, that they (the customers) should say ‘thank you’ for even having the service available. When asked about the future of SLA in the industry, the collective answer was that nothing will probably change, customers will not demand better SLOs (Service Level Objectives) and that the whole issue was quite irrelevant. One CEO suggested that the only concern of the CIO is ease of integration.<br />
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Is that so? Or are these guys burying their heads in the sand? When I asked about how many dealt with CIOs (as compared to business units), only one said that he did, and that it was an unpleasant experience.<br />
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How would you explain this discrepancy between what CIOs want and what SaaS CXOs would offer? And why is the state of SLAs in the industry is so pitiful?<br />
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<b>A Quick Historical Review</b><br />
I think the answers lie in the history of SaaS and how it penetrated the market. Around 12 years ago we started seeing the first SaaS applications (although no one came up with the name until a few years later). SaaS mostly targeted the SMBs who had no access to the enterprise software that was available to the larger companies. Either from a cost, or complexity or support point of view, the on-premise applications were out of reach for the smaller companies. When they started becoming available over the Web, the SMB were so delighted to even have a solution they were not going to bitch about the service levels being offered in the contracts. They were just happy that the apps were available. So, SaaS companies offered a 99% uptime which seemed pretty good (except that it translated into four days of downtime!). Nobody could talk about performance, as the dependency on the customers’ own network and on their ISPs allowed the providers an easy escape from accountability.<br />
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<b>The Corporate Business Unit</b><br />
Even though SaaS initially targeted the SMB, the big breakthrough came from the business units that found freedom in circumventing IT and getting their needs answered quickly (and in the process, flipping a bird to IT). The heads of the business units were mostly concerned with features and did not care much about SLAs. Even if they did, they did not have the experience and knowledge, that IT has accumulated over the years, on what to demand, how to verify that their service levels are met, etc.<br />
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<b>The New IT Manager</b><br />
More than ten years have passed with SaaS slowly establishing itself as mainstream, and conquering more and more territories. Old habits die hard and the sad state of SLAs remained where it had been a decade ago. Now, SaaS is finally entering the enterprise through the front door. There is a new generation of CIOs that are not threatened by SaaS and understand the freedom it offers them. They want to get back into the driver’s seat, clean up the mess that a decentralized SaaS policy created and control what is entering their domain.<br />
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As for the CIOs with the old-timer’s attitude, the Cloud hype has forced them to pay attention. When the CEOs caught on (hey, we can save a lot of money here) the pressure was on the CIOs to start acquiring Cloud Applications – SaaS. And, like it or not, there are numerous integration issues that demand that IT be in the picture.<br />
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Slowly, we are seeing a shift in the market. More and more CIOs and IT managers are in the picture. And when they see the lack of real certification or the famished SLAs offered by the vendors, they are probably baffled, at best, if not furious.<br />
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I believe that gradually, as more CIOs enter the picture, the SaaS providers will have to prove themselves as more mature, attentive and accountable vendors. I think that the IT customers will step-up the pressure and changes will occur. SaaS providers will succumb to provide a serious document with real numbers and repercussions.<br />
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In short, the differentiator is no longer the fact that a vendor offers SaaS, nor the feature set, nor the pricing. To distinguish oneself, a SaaS vendor will have to excel in every aspect of the service and provide the assurances for the service levels that CIOs are expecting.</div>
Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com2tag:blogger.com,1999:blog-30539899.post-77776533954608524492011-07-04T03:46:00.000-07:002014-06-28T03:03:43.007-07:00The CIO's Dilemma – Adopting SaaS as a Strategy“Luke, you're going to find that many of the truths we cling to depend greatly on our own point of view” (Obi-Wan, Star Wars, episode VI)<br />
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<b>'IT-Avoidance' Mechanism</b><br />
SaaS adoption has become an outstanding success, not in the only SMB which it targeted originally, but at the business-unit level in the larger corporations. SaaS became the ultimate <i>IT-avoidance mechanism</i> for the business department heads that were tired of waiting for many months (or years) for their IT needs, weary of investing huge budgets just to find out that the software did not deliver what was expected, or was outdated by the time it was implemented. With SaaS, they could start a free trial immediately and gain value of the solution with minutes, hours or days. IT managers sometimes found out that their internal customers were using SaaS software many months after it was a done deal.<br />
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<b>It’s All About Control</b><br />
This paradigm shift from transitional on-premise to SaaS (which is somewhat reminiscent of the PC revolution that empowered the end users and removed some of the dependency they had on IT), was not looked upon favorably by IT managers.<br />
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I believe that the main reason for IT's resentment towards SaaS, is the<i> loss of control </i>partly based on real problems caused by <i>IT-Avoidance</i> and partly is based on an emotional response to the notion of various business units not “needing” IT as much as before.<br />
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My premise is that <u>CIO’s must adopt SaaS – it delivers the goods and it is happening anyway – but for the adoption to be successful, they must regain control of the situation.</u><br />
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<b>Security</b><br />
IT usually brings up the ‘security’ excuse to kill SaaS deals, but I believe that many times the ‘security’ they are talking about is their 'job security', afraid to let go of assets that everyone is dependent on.<br />
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So let’s examine the real security issue. As I have mentioned in numerous talks and presentations, Cloud companies, as a rule, will do a much better job at data security and privacy than a hospital or a car manufacturer (or a bank, credit card company or NASA judging by the publications on the subject).<br />
Still, there is a major issue regarding SaaS accounts when they are not controlled by IT. Any business manager can swipe a credit card, and order 40 seats for her staff to start using an HR app. The manager knows nothing of security, nor does she bother much with it - the point is to get productivity up. The users are provisioned, not by IT, but by the business unit. When an employee leaves the company to work for the competition, IT is supposed to disconnect that employee from all the assets in the company. But how can they de-provision the employee if they have no access (or knowledge) of the various SaaS applications that person was using? Who can guarantee that this employee will not access company data from home or from the new employer’s premises?...<br />
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<b>Lack of Visibility</b><br />
Not only does the IT manager have incomplete knowledge of who is using what, even if they know that an employee has a SaaS account, there is no way to know if that user is accessing the software, how it is being used and what, if any problems are there. There is no visibility into performance issues. IT also has no knowledge of what part of the organizations’ data is stored where. And could it be that some of the same data is residing at different SaaS providers, and could it be that information at one provider is inconsistent with some information at another provider?<br />
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<b>Vendor Selection</b><br />
One of the areas of expertise of IT is the ability to select software solutions and evaluate the vendors. The business units do not have that ability, and frankly, they don’t give a damn. They want quick solutions within their monthly budgets and all other topics regarding security, integration, service continuity, financial viability, and SLAs are stuff that IT traditionally dealt with (and hence took forever to make a decision). So, IT is not involved in the solution/vendor selection process exposing the enterpise to bad choices and their consequences.<br />
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<b>Lack of Efficiency</b><br />
It is not uncommon in large, distributed companies, that different departments are consuming the<u> service from the same SaaS vendor </u>(or different departments are using similar solutions from different vendors) with multiple contracts in place, and perhaps different integration schemes. Of course this reduces the chances for bulk discounts and is inefficient in all aspects of organizational learning and business intelligence.<br />
Another aspect of control is the lack of ability to access, backup and analyze the company’s data or to impose regulatory constraints on the user.<br />
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<b>Lack of Strategic Planning</b><br />
The fact that each department is an independent SaaS consumer and that IT is not driving and controlling the company’s solution is a great impediment to multiyear strategic planning. The individual business units do not have a high-level view of the company’s needs and strategy. <br />
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The lack of strategic planning reduces the company’s ability to ensure security and to employ cross company data analysis (the data is distributed across multiple vendors) and may cause compliance and regulatory issues in the future.<br />
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<b>What to do, what to do?</b><br />
A following article will outline strategies to employ in order to get hold the SaaS situation. But it will suffice to say that IT needs to restore control and bring itself to the forefront. This means that, first and foremost, the CIO has to embrace SaaS and not fear it. Start by defining the strategic goals of Cloud computing in the organization. Understand who is consuming what in the organization. Review your upcoming upgrades and begin a process of considering SaaS to replace your on-premise solutions. <br />
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SaaS is not a threat but a wonderful opportunity for the enterprise and the IT organization. Don’t play a defensive game; rather, become a leader in this area for your company.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com5tag:blogger.com,1999:blog-30539899.post-10959228672772848592011-05-30T03:52:00.000-07:002014-06-28T03:02:20.097-07:00Organizational Culture and Company DNA – What Makes a Successful SaaS Company.“No people come into possession of a culture without having paid a heavy price for it” (James A. Baldwin)<br />
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It was always clear to me that success with SaaS was not about technology, but about execution. This week I got a clear reminder.<br />
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<b>The SaaS CEO Forum</b><br />
For the past few months I have been running a SaaS CEO Forum that meets every six weeks or so, each time hosted at a different SaaS company, by a member of the Forum . The forum consists of a select group of successful SaaS companies, that have been selling their service for a number of years and are dealing with issues such as growth, operations, sales, marketing and customer satisfaction. Every meeting has a theme such as running a fabulous inside sales teams, SaaS Service Operations, knowledge-as-a-service, etc.. Yesterday the forum was hosted by Avinoam Nowogrodski, founder and CEO of <a href="http://www.clarizen.com/">Clarizen</a>, a fast growing, market leader on collaborative project management. Beyond the very interesting review of the company’s clockwork marketing and sales operation, Avinoam gave a presentation on what makes a SaaS company successful.<br />
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<b>Successful SaaS Company</b><br />
No one can argue with the success of Clarizen, having grown 400% year over year, with an ever-growing community of happy customers, so it was worthwhile listening to Avinoam’s credo.<br />
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Clarizen’s CEO was talking about managing a company where execution is paramount and where Customer Success always comes first. He has been careful selecting an executive team that he regards as ‘A’ players and nurturing a culture of Respect, Modesty, Openness, and Accountability.<br />
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Among the factors Avinoam mentioned was “checking your ego at the door”, willingness to take risks, and acceptance of mistakes as part of the ever changing environment and conditions. Delegating Authority, Hands-on in your domain, Transparency and above all – Measure, Measure, Measure every aspect of the company’s operation; sales, marketing, conversion between each stage of the pipeline, responsiveness, costs.<br />
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<b>The SaaS Angle – Fast Forward</b><br />
While I agree wholeheartedly with all the above criteria being critical for a successful company, I asked for the SaaS angle. The answer was obvious even before I finished asking the question: “<i>Pace</i>”. In a SaaS company everything is <i>fast-forwarded</i>. The cycles in almost every aspect shorten and therefore the margins of error are ever so narrow. In a company that caters for the SMB in a low-touch model, the sales cycles are measured in days, not quarters, the software releases are shortened to weeks. The discovery of bugs usually occur within hours (or minutes) after a new version is introduced. Hence, Openness and Transparency are paramount and there is no time for ego games or controlling vital information (I have written about these aspects in the past: <a href="http://saasperspective.blogspot.com/2009/08/transparency-in-saas-service-operations.html">Transparency </a>& <a href="http://saasperspective.blogspot.com/2009/11/inter-department-communications.html">Communications</a>).<br />
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To reiterate – in a fast-pace, ever-changing, 24X7 environment, the need to feel the operational pulse, the need for responsiveness and open communications, the need for a listening ability and accountability are vital for success. Time spent on BS, on analysis-paralysis, on political games, on territorial squabbles, is time spent away from making sure your customers are successful, and that will be evident on the company’s bottom line and eventually, on the quarterly bonuses.Dani Shomronhttp://www.blogger.com/profile/11583137732143486946noreply@blogger.com2