Monday, September 20, 2010

Sir Richard Branson's Speech at Exact Target Connections 2010

Last Wednesday I attended the keynote address of Sir Richard Branson at Exact Target's 2010 Connections Conference.  It was absolutely awesome to hear Branson speak in person about the early days of his entrepreneurial journey.  He primarily covered the early days of Virgin Records and explained how the idea for Virgin Atlantic, his second major Virgin venture, was hatched.  In short, he said that he was tired of flying on airlines that treated passengers like second class citizens and thought there was a huge need for an airline that worked the way he thought it should work.  So he proceeded to start Virgin Atlantic by hiring "200 friendly flight attendants" focusing on what he described as "friendliness" over any other trait including experience.  In spite of the view of his two partners at the time that he was completely crazy, he proceeded to launch the airline.  He now says he was lucky that he didn't know any of the details because he probably wouldn't have proceeded with the plan.  The strategy worked and Virgin Atlantic has flourished as an airline that has friendly employees who treat passengers well.

He also made the point that Virgin is not about being the "biggest" in the businesses they enter but rather being the "best".  In the case of Virgin Atlantic, they have 35 aircraft in their fleet, which pales in comparison to its large competitors, but they have become one of the best and most well-respected airlines known for their flights from London to New York.

Virgin has over 300 businesses they have launched and have proven to make the recipe of being the best work on many occasions.  Eight of the Virgin businesses have exceeded a billion dollars in annual revenue.

They now have their sites set on space with Virgin Galactic.  Perhaps in space flight, Virgin will be both the best and the biggest.

Monday, September 6, 2010

What Does SaaS Really Mean?

Software businesses today all seem to be interested in pursuing SaaS (software-as-a-service) business models.  Trailblazers like Salesforce.com have shown that delivering functionality to customers over the Web can be beneficial to customers and vendors, alike.  For the software vendor, SaaS should allow them to more efficiently support clients by updating one set of code that instantly flows through to every single client.  Additionally, the annuity revenue stream that is generated through SaaS subscription pricing models tends to be preferred over the traditional "feast and famine" model employed by software companies that rely on selling up-front licenses to clients.  For the client, the up-front price should be lower and they shouldn't have to deal with any on premise hardware or software maintenance.  

So the debate about what SaaS really means comes into play when asking a group of software companies whether or not you have to maintain only one common, truly multi-tenant code base to be considered SaaS vs. deploying multiple hosted virtual instances of the code to support various clients.  The commonality between both of these options is that the pricing model is generally subscription-based on the software is provided over the Web without any on premise deployment on the part of the customer.  

So the question is whether or not you have to truly be deploying a multi-tenant architecture to be considered a SaaS offering.  I followed a heated debate about this on the SaaS group on LinkedIn and can see convincing arguments both ways.  I also know successful SaaS companies like Exact Target who are truly multi-tenant as well as successful companies such as Angel Learning (now part of BlackBoard) who are not.  Again, the common thread is the subscription-based model and lack of on premise hardware required to utilize the software functionality.  I suppose regardless of how you define them, the most important labels they can undoubtedly both claim would be high-growth and financially successful!