Infoworld had an article this past week titled Why businesses still hate enterprise software. The article lists out a bunch of pain points but #1 & #2 on the list were the high cost of ownership and difficult upgrades. The strain a solution places on customer is often overlooked part of selection/decision math (see our ROI blog) but even if it is overlooked on the front end examination it’s a very real cost that customers will incur and as you can read in the article, they are increasingly pissed off about it.

Certainly there is some great software out there that was and will be delivered via the traditional client-server model. And at the end of the day customers should care about the net value a solution delivers (we’d actually look forward to helping customers with this examination). That said it is refreshing to see broader acknowledgement of the support costs that can come along for the ride. Additional costs beyond what you pay upfront can be rich and may include installation, configuration, maintenance, upgrades, change management, help desk, trouble shooting etc. Opportunity cost, another often overlooked area, also can penalize customers as they tie up resources and scarce mind-share that could have been devoted elsewhere with better returns.

Software as a service and Envysion’s managed video as a service specifically seek to address this challenge head on. We aim to put no strain on a customers IT group or network. Customers only need a browser to access our software and services they never install anything on any client computer or server. Envysion upgrades (which occur every few weeks) are delivered seamlessly and never require customers to lift a finger. Our application is built for every day use and the every day user so help desks and heavy training requirements are a thing of the past. Should a problem arise we have a fully staffed NOC.  Actually we proactively go after problems as we monitor and manage the service and fix issues as we find them.

For those out there frustrated with complex video software and/or want a solution that delivers more while straining you less – give us a call, we’d love to talk to you.

A friend, who is out in the Bay Area, and I were talking this past week about product management and it got me thinkinking about product management in a SaaS environment. What stuck out to me as I thought about what’s different (vs. other spaces) was the ability to roll out a new version or completely new product every couple weeks. You can still have major ‘releases’, salesforce does them by the season, but you need to think about development prioritization, productization, pricing, communication really the whole bit on a much more accelerated pace. You also have the benefit (and challenge) of tons of real-time feedback you can get from customers on how they are using what you have out there. In a number of ways it turns the traditional product life-cycle dynamic on its head. It’s quite a balancing act.
My early take-away is that the ‘as a service’ model presents a flexible and fluid environment and that can present a tremendous opportunity for the nimble. Agility in development and responsiveness to customers pays huge dividends. However, it can present some dangerous candy for those not willing to commit and those without focus.  Even with the ability to go in so many directions you still have to pick your spots and follow through for your customers and on your strategy.
It’s a whole new world ripe with some great opportunity but at the core (call me old school) the same business rules apply.

Security Systems News had an insightful editorial on the Integrator of the Future on Friday. Coming from observations on the front line of integrators and customers looking at large scale implementations it points out some challenges for today’s Integrators and looks to how they might change for the better. The points that stood out to me were the need to take a more solution/consulting approach as well as the need to build a relationship with customers that evolves over time. Also called on integrators to be more aware of a customer’s network and be mindful of value (you can’t charge for something when you don’t deliver and prove the value to the customer).

You are probably not surprised to hear an ‘Amen’ from the managed video as a service community on these points. At the core of what we do at Envysion is a focus on our customer’s challenge and a focus on delivering breakthrough value in an ‘easy’ package. Of course we strongly believe a managed video service delivered via the ‘as a service’ model allows us to do more for customers and partners.  We also see it differentiating us from other players.

So will the current set of integrators adjust? Will next generation of solution providers fill the void? What we likely all can agree on is that over time the winner will focus on the customer and value delivery.  Customers get to vote with each new installation.

A friend forwarded me an article (thanks!) that covered a recently published study on SaaS adoption. The punch line is that small to medium-size businesses (SMBs) are becoming more sophisticated in their technology purchases and are embracing solutions such as software as a service (SAAS) and managed services. The survey found nearly 30 percent of them plan to implement SAAS solutions in 2010 to lower costs and maintain their competitive edge.

“SMBs are placing increasing importance on technology solutions that drive revenues, produce immediate results to the bottom line and have a direct, positive impact on the customer’s experience.”

Obviously we love to hear that SaaS solutions continue to resonate and it makes a ton of sense that small and medium sized businesses will leverage SaaS services given low cost of entry, limited overhead support requirements, ease of use etc. This of course leads you to larger customers…what about them? Larger customers would get the same benefits right? Well yes, but they also have more scale and perhaps can do it on their own, they have existing solutions, and importantly they also likely have people (with jobs and a voice) managing dedicated solutions in place.  So that means a solution needs to drive significantly more value to be worthy of consideration.

In Managed Video as a Service we see (and our customers agree) this ‘extra’ value that can compel larger customers to adopt. We actually have developed a prescribed pilot process that quantifiably demonstrates the value to customers.  Frequently first hand proof is required to compel larger customers to pull the trigger so that is what we give them. How many larger companies today have initiatives that can drive 10-15% gross profitability improvement? I would hope that would get the attention of any CEO regardless of size. To be candid the returns are better than that. To date we haven’t even attempted to quantify the longer term strategic benefits that Managed Video can supply (e.g. brand consistency, best practice training etc.). Its not that you can’t quantify it, it just takes longer and may provide more room for debate. Here at Envysion, we work with both large and small customers.  For the large ones we look forward to demonstrating why now is the time to move to MVaaS.

Refering back to my blog on SaaS being around for 114 years, Herman Hollerith didn’t get everything right.  According to IBM archives, Hollerith resisted new ideas for the operation of his machines and wasn’t working well with one of his best and original customers, the US government.

To quote the IBM archive of their employee publication “Think” from 1972:

About 1905, the U.S. Census Bureau gave him an ultimatum: improve the machines and cut the rentals (which each year about equaled his total manufacturing cost). To this Hollerith said, No. The Census Bureau said: Then we’ll make them ourselves and improve them ourselves. Which they did, using former Hollerith employees to run the operation.

A simple age old truth, you’ve got to listen to your customers.  The pace of change and the competition in today’s business makes this ever more important.  But technology still needed to be evolved to meet customers needs back in 1905.

Have you read Behind the Cloud yet? Well, it is probably an understatement to say that we can all learn a thing or two from the success that Salesforce.com has achieved.  Of course I was particularly eager to take in Benioff’s insights given our common roots in MVaaS and always good to learn from the best.  The book is set up as a collection of ‘plays’.  Each one is easily digested and I’d suggest many apply to all business models though obviously the focus is on cloud based companies. Overall it’s a good read, definitely worthy to bring along for your next plane ride.

While Salesforce is wildly successful, good business advice stands up when applied to others so I thought it might be fun to see how some of the play’s in Behind the Cloud apply and hold up to our experience in managed video at Envysion.

First up, #57 – Let Your Customer Drive Innovation. While part of the message here is obvious (listen to what your customers want) the real point is how the ‘as a service’ model lends itself uniquely to this mission. How you ask? Well a couple ways. First, because the intelligence resides in the cloud, and not on PC’s & servers, the ‘as a service’ model accelerates and simplifies the process of delivering improvements. Let’s be honest, traditional software upgrades can be a pain and when things are a pain you do less of them. How many of us are still using old versions of applications because we don’t feel like downloading or buying the new one? For traditional players it is a barrier to the roll-out, listen, and improve virtuous cycle. Second area that is unique in an ‘as a service’ environment is the ability to get visibility to what customers are doing with your application in real time and across all customers. What are they using? How? In an ‘as a service environment’ you can see real-time stats and respond. In Behind the cloud the salesforce.com example of how they watched customer usage to evolve thier ‘tabs’ is an example.

For me this play totally hit home. At Envysion we have an agile development model and literally release a new upgraded version of our application every few weeks. We have both formal and informal vehicles for customer feedback and are constantly using that to shape our development. Just this past Friday I sat down with Rob our CTO and we were talking through an upcoming feature improvement to our video search. In addition to the direct feedback/ask we had gotten from a customer we were able to consider usage stats from all searches (e.g. what time frames were customers pulling up) as we talked through a set of options. Of course we ended the conversation by agreeing that we would circle back again with power-users and vet our proposed approach. At Envysion we directly translate customer asks or new customer requirements into real time improvements in the application. We can see usage and build knowledge from that (e.g. exception reports that work well) we are also uniquely positioned to deliver these changes with no customer IT requirement. Customers can simply log on via a browser and boom they have what they asked for.

So while all companies benefit from listening and responsiveness to customers, there are some structural advantages that the ‘As a Service’ model provides. Behind the Cloud gives the Salesforce.com view and I can say firsthand that they are also in action here at Envysion!

I’m reading a new book called “The Future of the Internet and how to Stop It” by Johnathan Zittrain.    In the early part of the book Zittrain examines some of the history of the computer and data communications industry.   It seems to me that one of the first “computers” was sold as a service.  It’s arguably not software or even a computer, but the business model and type of service being performed is quite similar to SaaS.

In 1896 Herman Hollerith formed the Tabulating Machine Company (TMC).  He invented a machine to tabulate the 1890 census.  But instead of selling the machine to be used by the US government, he leased it.  The system was owned and operated by TMC and produced the results for the 1890 census in only 1 year the 1880 census took 8 years to tabulate)

In 1911, TMC and 3 other corporations merged to become IBM.

The book is an interesting read so far (just started it) and raises several social and legal questions about the Internet, free access to the Internet and regulation.

I almost never open marketing solicitation emails, but Friday morning I got one from IMS (a UK based research firm that covers the worldwide video surveillance market) that caught my eye.  Title was Top 10 trends in video for 2010.  I hadn’t talked to the folks at IMS in a while so I didn’t have a good sense for what they were thinking these days so I clicked through to the report to see what they had to say.

It didn’t take long for the smile to cross my face as I read through their report.  The first sentence of the report (here’s the full report) was:

“It has a host of names – Managed Video as a Service (MVaaS), Video Surveillance as a Service (VSaaS), Remotely Monitored Video – but whatever the name, 2010 will be the year it moves out of the shadows into the limelight.”

It has been several years since I posted on this blog, introducing the term Managed Video as a Service as a way of giving the new category we were creating a name.  The name isn’t that important, although it is really cool to see it being used by other companies and by research analysts.  What is important is that the segment is maturing enough that there is general recognition of how important it is and how much it is going to change the traditional video surveillance market.

I couldn’t agree more with Alistair’s position – 2010 is definitely going to be a game changing year for all of the SaaS and other as-a-Service models that are beginning to proliferate in the video world.  While there are a lot of different definitions and different business models, we all share the common goal – provide video in a service model that eliminates the barriers (economic, management, complexity) that have traditionally limited customers’ ability to maximize the impact and value of video.

I was recently asked by a customer if I could help him pull 30 minutes of video from 4 different cameras and then send it to him.  The problem with sending video clips is that the size of the file can be very large making it difficult to email.  A 2 minute video clip is about 2MB so a 30 minute clip would be much too large to email. 

 With MVaaS from Envysion a customer can log in remotely and download the video directly to the PC themselves without ever needing to send a thing.  Envysion also provides a feature called My Clips which allows cusotmers to download video and save it directly to our secure data center as well.  The My Groups feature allows customers to remotely share the video saved in My Clips with anyone in the organization without ever sending a thing.

The tools Envysion provides make it very easy to download and share video but the customer asked if I could still help them with these 30 minutes clips.  They were traveling and needed to get these video clips to an officer for an investigation which led me to a great service called Yousendit.com.   They provide digital content delivery so I signed up for the basic service which is free and allows me to send up to a 1GB file.  I was able to help my customer and sent the four 30 minute clips, about 60 MB of video. 

Having the right tool for the job can really save time and money.  The MVaaS provided by Envysion and the SaaS provided by Yousendit.com are both great tools that can really help get the job done.

Fredrik Nilsson of Axis wrote an article at SecurityInfoWatch about how SaaS is taking off in video surveillance.  It’s a good article and highlights some of the reasons that SaaS is gaining momentum, although as you would expect it is definitely told from the IP camera manufacturers perspective.

A key point jumped out for me as I was reading it.

Fredrik states that “instead of maintaining the recording and monitoring station locally, companies can now limit their capital investment to just the cameras and a gateway or router to the hosted storage. The vendor provides the servers that archive the video and manages them for the business”. To me this is one of the broader misconceptions I come across in the market: that SaaS in video surveillance equates to “hosted storage”. SaaS is a method of delivering functionality through software that is hosted in the network. Remote or hosted storage is an architectural decision that one can make depending on the circumstances.

I have talked to people that have declared that they tried to build a SaaS application, but they couldn’t get the service to scale b/c of the bandwidth limitations of streaming all of their customers cameras all of the time (here’s a hint: if you don’t have to stream the video all the time, don’t). I have also seen numerous players in the space touting their software as a service models when they have a hosted storage offering but you still need to load their video management software on your PC or a server in your enterprise in order to access the video.

The Axis article and these anecdotes highlight the fact that while SaaS is gaining momentum in video, many people still don’t understand exactly what it means to provide a SaaS offering. There are some great articles on SaaS at SandHill if you are looking for a bit more of a primer. In the meantime, I’ll take the increased visibility and focus on SaaS video businesses, even if a lot of people don’t yet get what it is.