Salesforce announces fourth quarter results

This past Wednesday, Salesforce.com’s announced that revenue for the quarter (that ended January 31, 2009) increased by 34% over the same period a year earlier. Even deferred revenue, which is a good barometer of new sales made by the company, was up by more than 26% quarter over quarter -- from $470 million in the previous quarter (ended Oct 31, 2008) to $594 million.

Obviously, the dramatically lower up-front costs of a Software-as-a-Service (SaaS) make that model very attractive to firms who are looking for ways to minimize large capital expenditures. And just as obviously, Salesforce.com CEO Marc Benioff will take every opportunity he can to remind listeners of this point....

"Salesforce.com is proud to be the first billion dollar cloud computing company," said Marc Benioff, chairman and CEO, Salesforce.com. "At a time when capital is precious, big-ticket software purchases just don't make sense."

Does this mean that your firm should pursue a SaaS strategy for your Customer Relationship Management system?
Not necessarily.

The fundamentals of your decision haven't changed. Sometimes, a SaaS solution makes perfect sense... especially if you have a highly mobile field salesforce. At the same time, however, making a switch to a SaaS model isn't the best option ... especially if your current CRM solution isn't hurting your business. And of course, it's absolutely critical to remember that the only way a CRM will help your business if it actually and really helps the salesperson on the street.

Nevertheless, I see this as relatively good news for the economy in general. Salesforce claims to have signed up 3,400 new clients in the quarter, bringing them to more than over 55,000 total clients and more than 1.5 billion subscribers. This tells me that firms are still willing to invest in improving their business. And that can only lead to good things, in the long run.

Salesforce.com, Inc.: CRM (NYSE)
Earnings announcement from Salesforce: Salesforce.com Announces Record Fiscal Fourth Quarter Results

Microsoft announces Windows 7 enhancements

Today, Microsoft published a partial list of the fixes and enhancements to Win7 that they are working on in response to user feedback. It's a nice list, and -- Project Managers take note -- it's an excellent policy to make this kind of information public. And based on the comments to the blogpost, I seem to find myself in the majority.

Microsoft still has not announced a date for the release candidate, but I suspect that it won't be long. Of course, the sooner they can get Vista off the stage the better. So I'm sure they're highly motivated to get Win7 out the door.

Read Microsoft's blog: Some Changes Since Beta for the RC

Salesforce data integration gets easier

One of the big challenges for Software-as-a-Service (SaaS) implementations is integration with operational systems. This can be especially difficult for organizations that rely on a high-volume of transactions from an existing client base to drive revenue. Since it is these types of organizations that can benefit the most from a solid CRM implementation, back-end integration becomes a critical success factor, and a key aspect of the system selection decision process.

Pervasive Software markets a product called Integration Manager that acts as a middleware tool to provide data integration between Salesforce.com and operational systems. A tool like this can provide two significant benefits.

First, it can significantly reduce the deployment time for a Salesforce.com implementation. Salesforce boasts of 3-week start-ups, but that is for a stand-alone system with no data and very little customization. It's hardly useful at all for a firm of any size or complexity. A substantive reduction in deployment time will dramatically improve the ROI of the system.

The second benefit comes in the form of improved quality. The biggest obstacle in data integration rears its head in the data transformation phase - the act of of manipulating the output of the systems of origin to conform to the destination system's requirements. A tool that is designed specifically for Salesforce can dramatically reduce the complexity of those transformations and improve the consistency of the resulting output. Both of these outcomes lead to higher quality data all the way around.

If your firm is considering a CRM initiative, please contact us. We can provide you with sound, objective advice in determining the best solution for your business.

Learn more about Pervasive Software
Salesforce.com, Inc.: CRM (NYSE)

Red Hat plans expansion of virtualization products

Red Hat recently announced the upcoming release of four new products designed to bolster its position in the server virtualization market. Their hope is that more corporate users will see open source solutions as being robust enough for mission critical systems.

The product line will be made up of: Red Hat Enterprise Linux featuring KVM, Red Hat Enterprise Virtualization Manager for Servers, Red Hat Enterprise Virtualization Manager for Desktops, and Red Hat Enterprise Virtualization Hypervisor. Red Hat also announced that they will base all their future virtualization offerings on the KVM platform and that they will provide migration tools for IT organizations currently using Linux 5 Xen. The Red Hat Enterprise Virtualization Manager for Desktops is to be based on Qumranet's SolidICE.

This means added competition for main stream virtualization vendors, and -- very likely -- downward price pressure being placed on those companies. Now that most organizations have gotten past their healthy skepticism of open source-based solutions, I believe that this product launch will create significant disruption in the virtualization marketplace. Firms like H-P will have to work even harder to justify premium pricing with reliability and ease-of-management data.

Read the article at InformationWeek: Red Hat Unveils Virtualization Portfolio
Red Hat, Inc: RHT (NYSE)
Microsoft Corp.: MSFT (NASDAQ)
More about Kernel based Virtual Machines

Portable Power using methanol

SFC, a company based in Brunnthal, Germany, is developing a fascinating portable electrical power system. Right now, development of the JENNY 600S fuel cell focused on military applications, which makes a lot of sense. Soldiers us a tremendous amount of batteries while in the field. Virtually all of their important combat systems require electricity, from night-vision goggles to communications gear to the iPods they listen to while on the move. This product is a portable device that recharges those batteries using direct-methanol technology.

Since the devices are small (9.92 x 6.73 x 2.91 inches) and very lightweight (only 1.7Kg), it's easy to envision them on cars, campers and even airplanes. I could see an airport kiosk that sells the fuel cells (about .37Kg of methanol) so that a traveler could recharge their laptop and cell phone batteries before getting on the plane. And I could see emergency equipment on all kinds of vehicles being kept at the ready with such a device.

The company already makes products for non-military use. According to their website ...

SFC fuel cells are busy all over the world, from Japan to the Antarctic, generating electrical energy for mobile homes, yachts, vacation cabins, traffic-monitoring systems, observation stations, metering and early-warning devices, electric cars, and lots more. And the number of uses is growing every day. An SFC product was also the first fuel cell in the world to be included as standard equipment in a motor vehicle. It supplies current to the electrical devices on board Hymer S-Class mobile homes.

I suspect it will take a few years for this to make it to the consumer market. But it opens up all kinds of interesting possibilities. I've long held that power is the next frontier in mobile technology. This product could change the shape of that frontier.

SFC Smart Fuel Cell, Inc.: English Home Page

Apple hits a bump on the road

For the first time in a long time -- three years actually -- sales of Apple computers declined for a given month. According to an article Wall Street Journal (Online Edition), the company's market share of PCs, measured in units, declined to 13.7% in January 2009, as compared to 16.4% in January 2008. The article indicated that unit sales of all brands of PCs rose 13% in January from a year earlier, but the dollar value of systems sold fell 3.2% as consumers bought less-expensive models. Hewlett-Packard Inc. had the strongest showing in the month, with a January 2009 market share of 40.1%. This is up from a 39.2% share of market one year earlier.

Apple may have to rethink its premium pricing strategy, at least in the consumer desktop space. Commercial users of Apples will pay the premium in order to get the required functionality, especially in their traditional stronghold of ad agencies, graphic design shops, and video production houses. But if Apple is serious about making a real dent in the consumer market, they will need to come up with a cost-conscious pricing model that reflects today's realities.

Apple, Inc.: APPL (NASDAQ)
Hewlett-Packard Company: HPQ (NYSE)
WSJ Article: Apple Stumbles on Price Pressure

Adobe reveals security vulnerability

Adobe announced that the PDF-related software are also affected by the critical security flaw, which could cause the applications to crash and potentially let an attacker gain control of a person's computer. The vulnerability, a Trojan horse identified as Trojan.Pidief.E and known heuristically as Bloodhound.PDF.6, affects Adobe Reader 9 and Acrobat 9, as well as earlier versions.

Given the popularity of the software, it's remarkable that there are only a relatively small number of reported exploits. Symantec has noted that fewer than 100 people have been affected since it noticed the attacks on February 12. In their blog address this attack, the security company suggests that users consider disabling JavaScript in Adobe Reader (instructions below) in order to keep this vulnerability from being exploited.

If you only use Adobe only for reading PDF documents, then I would suggest looking into Foxit. It is a free, very lightweight PDF reader that is far more efficient than Adobe's reader. The link is below.

And finally, if you would like a review of your organization's security and virus detection practices, please contact us at Roig Consulting.

Symantec's Blog: Targeted PDFs Used as Exploits
Adobe Systems Incorporated: ADBE (NASDAQ)
Foxit Software

Instructions to disable Javascript in Adobe Reader
Modify Adobe Reader preferences to disable JavaScript under the Edit | Preferences | JavaScript menu.

Small-Medium Businesses are driving mobility

According to ABI Research, the estimated number of mobile small-medium businesses (SMB) in the world (those with between five and 99 employees who use smartphones) will pass 200 million. Micro-business users (SOHO: 1-4 employees) will add another 100 million to this population. This represents opportunity for several important segments.

• Mobile Service Providers: This is the segment with the most obvious market opportunity. The SMB and SOHO population will need reliable and fast network access in current -- and potentially worsening -- market conditions more than ever. It's the only way they can exploit the natural advantages -- agility and flexibility -- they have over large businesses.
• Mobile application developers: Moving transactional capability off the desktop and onto the PDA will give any enterprise a leg up on their competition. As SMB/SOHO mobile users need to move faster and faster, they will want to be able to actually accomplish things while out on the road, before they forget.
• Automotive Safety Device Manufacturers: Let's face it. The more that people can do on their PDA, the more they will do on their PDA. And it's naïve to believe they will always pull over to the side of the road to do it. Look for government-mandated safety protocols to show up in the news over the next 12 months.

More information from ABI Research

Project Management is taking a hit

New research recently published by Josh Nankivel indicates that, "Nearly 30% of project managers have seen a cutback in investment or projects as a result of the current economic climate."

Rather than repeat the whole post, I'll just link to it on the Project Management Tips website.

Here is the link: New research: the state of project management

Oracle's 2008 Acquisitions

In 2008, Oracle made 11 acquisitions. They had cash, and they weren't afraid to use it. Here is the list of companies they bought throughout the year...

• January 2008
  • BEA
  • Captovation
• March 2008
  • Empirix
• May 2008
  • AdminServer
• June 2008
  • Skywire Software
• July 2008
  • Global Knowledge Software (GKS)
• September 2008
  • ClearApp
• October 2008
  • Primavera
  • Haley
  • Advanced Visual Technology (AVT)
• November 2008
  • Tacit Software

Without getting into the details of each company, what I think is most fascinating is the timing of the transactions. The crisis in the commercial credit markets really started to come to the forefront in July 2008. Since then, the company completed nearly half of its acquisitions, including one during November when the stock market was at its nadir for the year. To go even further, Oracle just completed an acquisition of mValent, a provider of configuration management software.

I suspect that Oracle will continue to pursue acquisitions aggressively. It's the old adage: "Buy low, sell high." With valuations as low as they've been in decades, companies with cash will find be able to expand into new markets rapidly. These investments will drain their cash for some time, of course. But when the market recovers, Oracle will be well-positioned with a diversified revenue stream.

What do you think??

Oracle's Acquisition Page: Strategic Acquisitions
Oracle, Inc: ORCL (NASDAQ)

YouTube considers a fee-based option

YouTube is said to be testing an option in which video owners can choose if their works will be downloaded, either for free or for a small fee (handled by Google Checkout). In the short term, this means iTunes will start to have competition for premium video content. But in the longer-term, this development will make it easier to share valuable (as in, people will pay for it) video across the medium. It also means that more high quality content will be made available as the talented producers will be able to generate some compensation for their work.

The download option is important because it will allow off-line viewing of the videos, which will make those long flights easier to handle -- provided you plan ahead, of course. Plus, all kinds of content, from training videos to sermons could be made far more useful to consumers with this option.

Keep an eye on this development. It's a potential revenue stream for Google, and the creation of an incentive for talented videographers.

Google, Inc: GOOG (NASDAQ)

Flexibility drives virtualization

Last month, Nemertes Research conducted a webinar that explored the driving forces behind and some of the implications of server virtualization. To me, the most interesting finding of the project was what drives the initiation of virtualization projects for enterprises. What they found was that the most compelling motivation was not cost savings, or even scalability, but Space, Cooling and Power Reduction. As you can see in the graph, twice the number of responses focused on those aspects as on direct cost savings.

This tells me that business leaders are using virualization as their strategy to deal with finite physical resources, such as floor space, HVAC capacity, and electrical service. Of course, the latter two are relatively easy to accommodate, but they almost always incur significant capital outlays. This could also mean that CIOs have somewhat modest expectations for cost savings through virtualization, but that the effects of a reduced hardware footprint are easy to understand, explain and justify.

This also tells me that virtualization initiatives will level off in 2009, but will become critically important once economic conditions improve and businesses look for inexpensive ways to enable growth.

View the Nemertes Research webinar (link requires registration): The Agile, Sustainable Enterprise: Server and Desktop Virtualization

Microsoft's planned foray into retail - why??

Microsoft has announced plans to open retail locations in the US. According to the news story, "With the retail strategy, Microsoft said it hopes to articulate and demonstrate its innovation and value proposition." (source: Microsoft Plans Stores) In doing this, I suspect that Microsoft is looking for something ... anything ... to steal some buzz from Apple. December saw Apple approach 10% of personal computer sales while Microsoft Windows' market share by a full percentage point for the second consecutive month.

In the grand scheme of things, I don't see this as being as big a deal as some the trade press is making it out to be. Plus, I wouldn't be surprised to see the main-stream press pick up on the story as though it's some grand shift in the PC landscape.

• First of all, Windows will continue to decline in market share, and these stores won't change that. Businesses are not replacing PC's as quickly, for entirely predictable financial reasons.
• Secondly, Vista has been, and continues to be, a nightmare for the company. The result is that corporate buyers are either waiting for Windows 7, or starting to explore the alternatives. At least some of those who explore alternatives won't come back.
• Finally, at the end of the day, Microsoft does not sell computers. They sell a few devices, like the Zune and the XBox, but that's not enough of a product line to make a retail store a destination. If anything, the Apple stores will look even more exciting and more compelling by comparison.

In the end, I predict that this will be a "phase" Microsoft goes through. It will last 5 or 6 years and then quietly fade from view.

Microsoft Corporation: MSFT (NASDAQ)
Apple, Inc.: AAPL (NASDAQ)

The Future of BearingPoint looks dark

The consulting business requires a fair amount of upfront cash. The consulting firm delivers service and pays its employees right away. But the revenue from that work doesn't show up for at least 30-40 days. In the meantime, the firm has delivered two, maybe three, paychecks. As credit lines expire, I believe we're going to see more evidence that the credit crisis is causing widespread damage.

The following is taken from an article posted last week on Yahoo! Finance.

BearingPoint. (BGPT (OTC); about 16,000 employees). This Virginia-based consulting firm, spun out of KPMG in 2001, is struggling to solve its own operating problems. The firm has consistently lost money, revenue has been falling, and management stopped issuing earnings guidance in 2008. Stable government contracts generate about 30 percent of the firm's business, but the firm may sell other divisions to help pay off debt. With a key interest payment due in April, management needs to hustle - or devise its own exit strategy.

I see this as an opportunity for smaller firms, which do not have the same overhead and legacy cost structure. Roig Consulting has no debt and is well positioned to meet customer needs for a very long time. I would imagine that other small, specialized firms are in a similar position.

Intel makes a $7 Billion Bet

Earlier today, Intel announced a two-year plan to expand existing factories in New Mexico, Arizona, and Oregon to manufacture silicon wafers with 32nm process technology. This announcement, coming during these economic times, is certainly not trivial... and it is some welcome news on a day when the markets are reacting with disapproval to Pres. Obama's Monday night press conference and Treasure Secretary's Geithner's bank rescue plan. As of this writing (12:40pm EST), Intel's share price was still struggling (down a little over 3½%).

Nevertheless, I see this as boding well for Intel's future. AMD is having trouble keeping pace in terms of price & performance. Microsoft is pushing hard to get Vista in their rear-view mirror, and the release Windows 7 will likely inspire consumers to replace their now-aging XP machines. Plus, the claim of 7,000 new jobs in those three states will help to put the negative vibes of the Irish plant closings behind them. Expect Intel to reestablish themselves as the king of the chip mountain inside of 15 months.

Read Intel's Press Release: Intel To Invest $7 Bln. In US Manufacturing Facilities
Intel Corporation: INTC (NASDAQ)
Microsoft Corporation: MSFT (NASDAQ)

SugarCRM adds external links

SugarCRM is the leader in the open source CRM space. At their recent user conference, they announced additional capabilities for the product aimed at incorporating external data - from Zoominfo and CrunchBase - into the system.

This is, in my view, an important development. Both data sources contain fairly reliable information about businesses and decsion makers. SugarCRM's claim that they have embedded connections to both into their product means that users will have a relatively easy time connecting their proprietary contact info to the information contained in those systems.

Right now, all of this is based on their press release, and I don't have first-hand experience with this new feature yet. So it's probably a good idea to give this a few months to settle in before incorporating it into your sales process. Nevertheless, the early adopters on your team will probably find it very useful.

If you are wondering about how or if a CRM system might be valuable to your firm, please contact us at Roig Consulting. We can help you sort through all of the options and guide you to a decision that is best for you.

More information:
SugarCRM on the web
Zoominfo
Crunchbase

The SugarCRM press release as posted on CRM Daily: SugarCRM Unveils New Features, Cloud Services

The admissibility of a warrantless cell phone search

Do you store sensitive information on your cell phone? And by sensitive, we could mean names, phone numbers, photographs, and even personal "journal" entries. Chances are the answer is yes. And chances are that, if you're pulled over and your cell phone rings the arresting officer could be within his rights to answer your phone and search it for anything incriminating.

Right now, case law is split. The cases that experts are keeping track of generally involve drug users, drug runners, and their suppliers... and the arresting officer detected illicit drugs in the vehicle and took the driver & passengers into custody. It was when they were in custody that the phone rang, leading the officers to take possession of the phone and search it for clues.

I suspect that most of my readers don't engage in that sort of activity, which greatly reduces the chances of actually getting searched, handcuffed and carted away. But it can happen (think again before drinking and driving, friends) and if it does, your cell phone -- and all of the information on it -- might be used in any manner of criminal fishing expedition.

Read more at C-Net: Courts Split on handheld search

Intel shifts chip design direction

Moore's Law asserted that processing speed would double every 18 months. It was really more of a promise than a prediction, and for several decades, the technology industry delivered on that promise. That may be changing.

At the upcoming annual International Solid-State Circuits Conference, which starts Sunday in San Francisco, Intel is presenting research findings that could completely change the direction of chip design for the next 20-30 years. Instead of focusing on raw speed ... a focus that has given mankind affordable multi-gigahertz personal computers ... the company is moving towards something they call a "System on a Chip" or SOC. This will result in chips that can completely different tasks, such as core processing and radio transmission. Such a chip could enable over-the-air connectivity at speeds that rival (and maybe even surpass) the highest speed tethered connections. Some are predicting transfer rates as high as 5gb per second, which would make today's 3g and tomorrow's 4g networks feel like the old-time dialup 1400 baud modems.

This is garnering a lot of attention from industry insiders, even if the average consumer could care less about it. I suspect this development will turn out to be a game-changer in favor of Intel, and AMD better catch up quickly. And the wireless carriers had better pay close attention, too.

Read more from other bloggers:
Wall Street Journal: Digits
C-Net: Nanotech - the circuits blog

Microsoft offers a Windows 7 upgrade that really isn't an upgrade

Microsoft announced that they will be offering an "upgrade" for Windows XP users, which would normally mean that the installer can skip the Vista installation, and go directly to Win7. But that entirely reasonable conclusion would be wrong. The "upgrade" will require a full installation of the new O/S, meaning that all existing data and programs on the machine would be lost. David Smith, an analyst with Gartner Inc., interpreted this announcement by saying, "They're talking about the upgrade price."

For enterprises seeking to simplify the shift from WinXP to Win7, this announcement offers no solution. In fact, if this approach stands, it will really discourage firms from converting existing PC's to Win7. Instead, they will move to the new O/S gradually, as older PC's are sent to the great motherboard in the sky.

The same can be said for the personal use market, as consumers will generally not be willing to go through all the hassles associated with backing up all of their files.... the most challenging of which will be the various programs they've bought, downloaded and installed over the years. Finding license keys, installation executables, and ensuring compatibility would likely overwhelm even sophisticated consumers, let alone the vast majority who don't really think about such things.

That's not to say that Microsoft's decision is unsound. In fact, it's probably a very wise move. That's because it means that they don't have to build and support a migration package, which would be fairly tricky given the significant differences in the systems. This will help Microsoft accelerate the general release of the product, something they seem to be doing given their recent decision to move directly from a single beta release to a release candidate. Furthermore, in the words of Michael Gartenberg,vice president of mobile strategy with JupiterMedia, "For most end users, it will probably mean that they end up with a more reliable installation."

So in the short term, it means that Microsoft will have to wait for widespread adoption. In the long run, it means that new PC's will have Win7 pre-loaded sooner rather than later, which means that Microsoft will be able to put the Vista debacle behind them sooner, rather than later.

Microsoft Corporation: MSFT (NASDAQ)

Casinos may be the next IT growth target

For several years now, the gaming industry has kicked around the idea of "server-based gaming." In a nutshell, it means replacing the video slot machines with more of a dumb terminal, which is connected to a powerful server in the back room. A customer would then have a choice of games to play on the single machine. Industry leaders see this as a opportunity to compete for younger visitors, who are used to virtually limitless variety in entertainment choices.

Personally, I find the gaming industry morally reprehensible. And I find it unconscionable that state and local governments target the poorest of their populations in lotteries, which are truly a voluntary tax on those who do not understand statistics.

Putting those feelings aside, this change represents an opportunity for software developers and network engineers in the coming 2-4 years. For the network engineers, the opportunity lies in the wiring of old buildings and the build-out of special purpose data centers. For software developers who have specialized in game design, there will be plenty of new work to do.

The change will be slow, because the industry is highly conservative and risk-averse. They will want to be absolutely sure that the games are protected from cheating, that they can be monitored, and that they will be highly reliable. Nevertheless, the change will come. The casinos have been playing around with CRM systems and data mining for almost a decade, now, and those guys know -- if they know nothing else -- how to take exploit an opportunity.