The objective of the summit is to accelerate segment growth and speed adoption of MVaaS and Hosted video solutions. The agenda is geared toward business development and generating a productive dialogue that will inform how to best attack the opportunity. And of course Boulder is a great place to escape the summer heat and humidity hitting most of the country.

Find registration information here or give us a call if you have questions.

Zoosk is (apparently) an online dating service that just surpassed Match.com in total traffic recently.  Their advertising is funny but over the top (you’ll likely only find it late night on 2nd tier cable stations) and definitely not safe for watching with, oh,  just about anyone I can think of in my life.  On the surface, there isn’t a lot that we have in common with them.  They are a consumer play, they are a freemium service, and well… they make money by helping singles hook up, I mean find lasting lifelong relationships.

Despite the differences we may have, we do have one very important thing in common and it is on this front that I aspire to be like them.  Zoosk, like Envysion, is a Software as a Service provider.  I had the pleasure of listening to their co-CEO , Alex Mehr, last week talk about their business.  One of the coolest things he shared was how they run their software development shop and test the various capabilities and functions that they offer to their customers. 

They run two distinct instances of their application at all times (an A and B instance).  They push new functionality and make changes to both instances every day or every other day.  When they want to try something new, they come up with their two best ideas, implement one version on the A instance and one version on the B instance, measure the results, and then kill the loser – putting the winning idea on both platforms.

I thought we were advanced with our service where we push new capabilities and try new features every two weeks.  These guys are leveraging the benefits of SaaS to a degree that I hadn’t even contemplated before.  Poor Rob Hagens – I am now going to be badgering him on why we can’t do releases more frequently, try more things, and react even faster to customer requirements!

Now, before you get all spun up pointing out that Zoosk is a consumer play and their user requirements are not anything like the traditional security focused video surveillance users that have effectively used the same basic video functionality for the past 10 years and so why do you need to change functionality or react to customer requirements when they don’t ever change… remember, our largest customer has over 1,300 users but only 3 people in loss prevention/security.  1,297 of them had never used video before and are using it for things that even they didn’t know they would want to do before they tried our service.  That is just one customer.  Expand that to the entire emerging market MVaaS is creating and you have a whole bunch of new users and requirements happening very quickly.  The winners in this space will be those that can react quickly and get customers what they want.  Two week iterations on a single instance of the platform may be enough to maintain our lead today, but if the MVaaS market continues to grow as it has been, it may not be enough down the road.

Get ready Rob – I may ask you to spend some time checking out Zoosk as a business expense!

Top line growth is paramount to business start-ups, and this is no different for us.  Our focus on attracting new customers has not changed.  What has changed is how this growth is measured.

In the past, we would tout the Contract Value of the customers we had signed in a given month.  But as illustrated in the previous post, this number can be misleading.

Therefore, the primary metric for our Company (other than cash) is Committed Monthly Recurring Revenue (CMRR).

CMRR is the total of all monthly recurring revenue, net of expected churn during the next six months.  The metric includes revenue that has been installed and is being recognized, as well as revenue that has yet to install but has been committed to by a customer.

Why did I bring this up?  Prior to Envysion’s launch of Envysion Video in 2007, software-as-a-service had not been introduced to the video surveillance marketplace.  We were one of the first companies to the mark.  It has taken some time to help educate the market, but we believe that the more and more companies are recognizing the unique benefits of MVaaS. 

With success has come a clearer focus on achieving our growth aspirations.  It has also caused us to reflect on what the growth may mean to current and prospective investors.  The conclusion was that the metrics we were utilizing to gauge performance were not adequate.  They served us well for a time.  But as our growth has accelerated, the metrics were not adequately presenting our financial performance.  In a sense, we risked becoming pilots without an instrument-rating.

As speculation persisted over what happened (over the period of weeks, probably), one thing stuck with me.  A primary driver of the tragedy was the fact that JFK Jr. was not qualified to fly at night.  He was not an instrument-rated pilot.  Therefore, since the flight was at night and the weather was poor, he was unable to utilize visual cues (e.g., the coastline) in guiding his pilot reactions.  And since he was not qualified to fly utilizing only his instrumentation, he became disoriented and crashed.

I am not well versed in the field of aerospace.  My knowledge begins and ends with the requirements of lift and thrust.  So the fact that the concept instrument-rated has stuck with me is curious.  And it is more so as we’ve undergone a shift of the instruments that we use to measure our performance at Envysion.

Because many of today’s SaaS solutions blur the line between a software solution and a business service, a widening array of institutions are now exploring whether they can add SaaS solutions and cloud computing services to their corporate portfolios to better serve their customers and gain a greater competitive advantage.

The article provides Bank of America as its key example. And suggests it’s a ‘win-win’.

BofA recognizes that it needs to offer its customers a broader set of services to better fulfill their needs…Selling SaaS and cloud computing services through an established institution like BofA gives these solutions a new level of credibility in the marketplace.

BofA in this example is aggregating a collection of services that are fairly unrelated but meaningful to thier target customer and providing some degree of ‘trusted advisor’ in reselling cloud services.  So what about for reselling managed and hosted video services? Who’s got next?
While it would be fun to throw names out there, for now I’ll focus on describing a couple potential options. The first is likely pretty obvious, an aggregator of one flavor or another likely functional (everything IT: managed video, network, software etc) or segment oriented (everything retail: real estate, managed video, facilities). The second type of reseller that may emerge is a value added reseller that connects the clouds together in a meaningful way. This ‘cloud connector’ would do things like seamlessly integrate a customers CRM data to their ERP data.  I see this cloud connector as much like the successful system integrator of the past twenty years.  They will resell sets of cloud services that work on their own but also interdependently as a system for customers. 
I’ve got a strong bias that a successful reseller needs to add value so my money is on the cloud connector. I’d be interested in hearing from folks out there some already out there. Our Chief Architect (a.k.a. Jeff Gordon) and I couldn’t come up with a good one.

I reflected on the study and the agility take-away a bit as I was flying to DC for a customer visit. At the end of the day the number one driver for managed video and our MVaaS solution is and will continue to be profit improvement. Together with incredible return on investment, customers see compelling value that in turn drives adoption. While I understand that agility for a customer has value in and of itself I would caution customers and providers alike that going quick without purpose can be just as dangerous as going slowly. As a provider I would never want to lose sight of the application use and bottom line value delivered for customers. Certainly agility for its own sake was not the take-away of the Sand-Hill study. Actually the punch line was as it should be, that adoption will be driven by business value and I could agree more. It may sound strange that someone in the cloud space would deliver a cautionary message – to clarify, my point here is that agility is part of the story. Just as the cloud is part of the story. The cloud offers fundamental advantages to customers and providers alike. It can be an accelerator and differentiator but I hope we learned lessons from the internet explosion and the ongoing mobility boom that at the end of the day it is about value add. Just setting up a web-page didn’t translate to long term success just like putting an application or platform in the cloud won’t either.

So that said, agility is an important part and enabler of the MVaaS value proposition. Customers who are using our application can rapidly scale additional locations, users, and usage. They can immediately receive application updates and requested improvements & refinements. They can easily integrate additional business systems to video and leverage social media influenced collaboration tools. A customer can focus their internal IT resources on other areas and IT investment on value adding solutions vs. help desks and administrators. Customers can immediately leverage Envysion’s growing set of best practices, see their usage statistics and drive continuous operations and profit improvement all in real time.

Yes, at Envysion we put the advantages of being in the cloud and a software as a service provider to good use and we are excited to position our customers with greater business agility. But for us our #1 source of pride will always be delivering bottom line profit improvement and value delivered for customers.

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.

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.