Back to the Future: Software Moves as Catalysts for Driving Change

Several events in the software world during 2012 will have a notable impact on the industry for years to come, according to SandHill’s industry observers. Some are striking enough that our panelists think they deserve an award.

What software event that happened in 2012 will have the most impact over the next two to three years?

Lincoln Murphy, founder and managing director, Sixteen Ventures:  From a purely commercial standpoint — software innovation aside — there was one event that should have the attention of everyone from freemium startups to the biggest, entrenched enterprise software vendors: Microsoft’s acquisition of Yammer. Microsoft bought Yammer, a four-year-old company, for $1.2 billion not just to expand their market or for their “Cloud DNA,” but because Yammer was, quite simply, beating them in the market. This should make legacy enterprise software and ISV incumbents open their eyes to the reality of cloud startups in their market.

As an industry, enterprise software companies should have learned from sneaking up on CRM vendors — including Microsoft — and taking market share. But it was brushed off as an anomaly. In 2012, 2013, and beyond, cloud-native companies disrupting and displacing entrenched, on-premises software vendors is no longer an anomaly; it’s rapidly becoming the norm.

Yammer, a cloud-native company, was winning deals against Microsoft SharePoint; and Microsoft didn’t see it as (or perhaps admit it was) a threat until it was so late that the option of buying Yammer was only available at a premium. If you’re the incumbent on-premises software company being threatened by cloud-native vendors and FUD doesn’t work anymore, what’s your move?

Kevin Cox, vice president corporate marketing, Actian Corporation: The thin client or mobile device or smartphone established itself as the most consumer-desired platform for software consumption and a dramatic extension of cloud as the new most desired platform of software. This will play out over the next three years as a disruptive reshuffling of middleware, applications and service provider markets.

Guy Smith, chief consultant, Silicon Strategies MarketingThe utter domination of Android for smartphones is a shift that cannot be discounted. Android came from nowhere to market dominance in less than two years, which changed everything. There appears to be no slowing its growth save for market saturation. If Apple releases anything like Apple Maps again, their halo sales will drop and Android will own it all.

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The Battle Heats Up: Predictions on Winning Software Startups in 2013

Who will be the young software players and startups to watch in 2013, and why? We recently asked this question of our industry observers and received a variety of predictions.

Big Data, business intelligence, and analytics space

Guy Smith, chief consultant, Silicon Strategies MarketingWithout naming specific companies or founders, the players to watch will be the Big Data geeks. Advanced analytics are the next phase in wealth generation via info tech, and the Big Data folks that bridge petabytes and BI will make some good coin.

Peter Auditore, principal researcher at Asterias Research:  New agile database vendors such as Cloudera, Actian and others will provide fast, affordable solutions that address the demands of Big Data.

Jeff Kaplanmanaging director of THINKstrategies and founder of the Cloud Computing ShowplaceThere are many, but one worth watching is SiSense in the analytics market and Apprenaissance in the mobile environment.

Howard Dresnerpresident, founder and chief research officer, Dresner Advisory Services, LLC: As the business increases their influence in the purchasing process, vendors that emphasize ease of purchase, deployment, use — and time to action — will be the winners in 2013.

Joe Cordo, CMO, ExtrapriseA player to watch is Appature as they have already built unstructured capabilities into their campaign management platform.

Dave PetersonChris Lochhead, Al Ramadan; co-founders and partners at Play Bigger AdvisorsAndreesen Horowitz-funded Good Data is changing the agenda from business intelligence to monetizing business data. They are fully charged and ready to bash the legacy BI market and deliver a new way for CEOs to monetize their data.(Full disclosure: they are a Play Bigger portfolio company.)

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8 Perspectives on Software Vendors to Watch in 2013

SandHill’s questions on predictions as to how the software vendor landscape will change in 2013 found agreement among industry observers about the changes facing legacy software powerhouses. The questions also sparked tirades about Microsoft. Dive into their perspectives on the difficult challenges and necessary “rebooting” ahead.

Q: Which three to five software vendors will face the most dramatic change to their business in 2013?

Peter AuditorePeter Auditore, principal researcher at Asterias Research:  SAP, Oracle and Microsoft will face the greatest challenge to their business models as the disruptive SaaS and cloud vendors begin eating their installed base with new and innovative licensing models that completely change the enterprise software space.

SAP in particular is in an extremely weak position as it has been unable to bring one single SaaS or cloud product to market. Business By Design, Streamworks, Sales On Demand and Sourcing on Demand along with the massive push on sustainability have missed the mark and completely failed.

IBM and Oracle will gain tremendous competitive advantage with hardware software offerings at price performance levels other vendors can’t meet.

Paul Resslerprincipal, The Cirrostratus Group:

  • Cisco, who we often don’t think of as a software vendor, will make significant product changes to address the software-controlled network business.
  • VMware will make some sort of major acquisition that will put them into the network infrastructure business, giving them the opportunity to dominate the software-controlled network space.
  • HP will try to develop a more focused enterprise software strategy. This will result in continued upheaval in their business including niche acquisitions and significant layoffs. Unfortunately it will not be clear by the end of 2013 whether this strategy will be successful.
  • BYOD (bring your own device) and increased use of mobile enterprise applications will put tremendous pressure on managing mobile security. Symantec will be well positioned to provide mobile security solutions and will provide many new offerings in this space and go through lots of growth. Other major software providers will make acquisitions in the security space to compete.

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Q&A with Software Startup Druva

Editor’s note: Druva’s inSync is a cloud-based unified solution for managing endpoint data in a mobile world. In this interview, Jaspreet Singh, founder and CEO, explains how the product differentiates in its market and how it provides value for enterprises. He also discusses an important attribute for startup CEOs. This article is brought to SandHill readers in partnership with ProductNation. When and where was your company launched?

Jaspreet Singh: We founded Druva in July of 2008 at Pune, India. We eventually moved to the United States after a Sequoia investment in January 2010. Please describe your product and your market.

Jaspreet Singh: Druva provides a unified solution to protect and manage endpoint data for enterprises. The solution integrates three functionalities — award winning backup, secure file-sharing and data loss prevention and analytics — to create a single unified cloud for IT to protect, manage and empower end users.

The enterprise endpoint landscape is ever changing. From PCs and laptops to smartphones and tablet devices and now a rising BYOD trend, enterprise data is spread across users, platforms, devices and geographies.

Data protection has been a crowded market space filled with legacy solution providers that have upgraded traditional server backup solutions to fit the mobile enterprise user. This has resulted in a lot of unhappy enterprises and great resistance from the end users to using those products because the solutions are resource intensive or do not offer sufficient security over public networks.

We built inSync specifically for the mobile user to address all the issues that legacy solutions were failing to address. The non-intrusive nature of the solution ensures that end users don’t even know it’s there. Our product helps users make the best use of the data and at the same time enables IT to protect and control the same information. The users can use Druva inSync to share and collaborate with peers on the data from any device. IT gets a single console to back up corporate information, visibility into what and with whom users are sharing, and is able to control the data using data loss prevention and analytics. It’s the industry’s first solution to integrate these features into a single unified solution.

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Conversation with Customer Interaction Management Provider, Drishti-Soft Solutions

Launched in 2003, Drishti-Soft Solutions specializes in software products for Customer Interaction Management and now empowers more than 10 million customer interactions per day for customers in 40 countries. We interviewed CEO Bishal Lachhiramka about the company’s product development journey and other advice for startup CEOs. How did your company originate?

Bishal Lachhiramka: When I and the other founders (Sachin Bhatia, VP Business Development, and Nayan Jain, CTO) were in college 10 years ago, an idea clicked in our heads to build a technology to manage information better than existing ways, something that would stand ahead of its time even if we take today’s scenario.

While talking to seniors and advisors, we were told that India was not the location for building software products. Call it youthful exuberance or passion — whatever it was, we believed that we could succeed. This was the seed of Drishti, but we wanted to learn business fundamentals first before turning on our geek personas.

We provide innovative solutions that help businesses improve and manage their customer experience and customer reach. We were adamant that this technology would change how information is managed. Looking towards the future now, we aspire to be one of the top 10 recognized CIM solution providers across the globe. Is there a story behind your company name?

Bishal Lachhiramka: The meaning of the word Drishti is “vision.” When we started the company, we only had a vision. That vision was to build a successful technology from India and change people’s perception on our capability. The strongest thing we had when we started the company was purpose and vision. What is your target market, and did it change from what you envisioned at the outset?

Bishal Lachhiramka: Our target customers include: Hospitality, Healthcare, BPO providers, BFSI, Entertainment, Travel & Tourism, and B2C enterprises.

We initially catered our solution to enterprises and BPO providers. But small and medium-sized businesses (SMBs) have always been an important segment for our company. Our biggest challenge to date is scaling our solution to this segment, not only in terms of acquiring new clientele but to also help their businesses grow in the long-term.

Through hard work, several revisions and iterations, and constant learning with external help, we developed a better understanding of the SMB customer segment, sales process and success criteria. Thereafter, we were able to establish effective sales practices (including CRM development) that helped us address the challenges in this market.

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SaaS and Silicon Valley are Game-Changers in India

A revolution is taking place in India’s businesses, which is transforming India at large. It began with mobile phones. Although there were telephones in India prior to mobile phones, they never took off in a big way. But mobile phones are so inexpensive and provide such great benefits that now everybody has a phone. The software-as-a-service model is a similar phenomenon in that SaaS fills a void that could not be filled in any other way. SaaS is an inexpensive way for India’s businesses to have good-quality software that makes their businesses much more efficient and effective.

SaaS will be even more of a game-changer in India than it has been in the United States. It’s not just because of the pricing model; it’s also because the time is right. SaaS products are proliferating at the same time as ubiquitous mobile devices and the flood of Big Data are causing companies to look for new business solutions. As businesses embrace SaaS for their critical business functions, they get more velocity in their business, which makes them more competitive in their markets.

Local products — made by local Indian software companies that understand the local business needs — are a key factor in the growing use of SaaS solutions. Improvement of Internet services in India has also contributed to SaaS adoption. A third factor is the fear that not using SaaS solutions will cause a company to be an outlier. This was not the case a couple of years ago. So it’s a tipping point-phenomenon coupled with more availability of local products at a very attractive price point.

A major transition is underway in the technology stack. In the life cycle of the software industry, new solutions typically come from startups and small companies as opposed to large companies. We see this happening again today in India where the small, nimble startups are shifting their business to create SaaS solutions. Even so, some startups are dramatically more successful than others, due in large part to two enablers.

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How Silicon Valley’s Community Gives Back

Editor’s note: “Silicon Valley is a unique, vibrant intermingling of different ideas and cultures resulting in innovation coming from all parts of the world,” says Raju Reddy, executive vice president of global services at Hitachi Consulting. And it was the ideal location for the recent Sevathon 2012, the annual walkathon that brought together more than 60 Bay area profit organizations to raise funds for nonprofit orgs. In this interview, Raju shares insights about the Indian technology community in both the valley and in India and how U.S. technology companies can get involved in “giving back” and helping others. My Internet search reveals that you’ve been very involved in helping young entrepreneurs for many years.

Raju Reddy: Professionally, for me, mentoring others is very important. Like other entrepreneurs in Silicon Valley, I’ve been a big beneficiary of people giving back. Many entrepreneurs in Silicon Valley kind of take it for granted, but we’re surrounded by such a wonderful infrastructure of people and organizations to help build a company. I have always really appreciated that and tried to work with other entrepreneurs and help them build companies.

I spent about 10 years in Intel before I started my own company, Sierra Atlantic, in 1993. We were venture funded by NEA, Walden and GE Capital, and I had some great board members and mentors. At the end of 2010 Hitachi bought my company. I also had been mentoring an entrepreneur in Toronto, and that startup was successfully acquired by Intel about the same time as the Sierra Atlantic acquisition. Currently I serve on the board of RedBus and GharPay, both in the consumer Internet space.

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CEO Attributes for Leading a Company from Launch to Success

Editor’s Note: InnovizeTech Software and its product, Sapience, is an early leader in India’s emerging software products story. Earlier in his career, InnovizeTech’s CEO and co-founder Shirish Deodhar founded two IT services companies, which had successful exits to Symantec Corp. and Symphony Services. Deodhar is also the author of the book, “From Entrepreneurs to Leaders.” In this article, he shares with SandHill readers his insights on personal attributes that are necessary for a CEO to lead a company from launch to mid-stage to success.

InnovizeTech Software is based in Pune, India, and started operations in early 2009. Its product, Sapience (meaning wisdom, astuteness and the intellectual ability to penetrate deeply into ideas), helps companies to increase work output by 15-20 percent – without requiring any change in existing processes. It’s a patent-pending, award-winning solution and the first such product that is designed for the enterprise. It gives managers the “big picture” about work effort while respecting and protecting individual privacy. Sapience is available in a SaaS model for SMBs and supports on-premise installation for select large customers.

Four key attributes of successful early stage CEOs

Success as a CEO is not guaranteed. The best CEOs may fail, and someone not as good may get lucky. Still, there are four personal attributes and mindsets that I believe are crucial for becoming a successful CEO.

1. Integrity and optimism

You will be selling your vision to co-founders, employees, investors and customers. The actual product may end up being very different from the initial concept. Earning and retaining people’s trust through the inevitable transitions is possible only if the CEO’s integrity is self-evident in his/her communications and actions on a continuing basis.

A successful CEO must be optimistic. This does not mean a blind belief that everything will go well or pretending that everything is okay when it may not be. It is more an attitude of “Let’s get on with things, know where we are, and change what is not working.” This requires honest and comprehensive communication at all times and ensuring that it reaches everyone.

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How Capillary Technologies Became a Top Provider of Retail End-to-End Customer Engagement Solutions

Editor’s Note: Launched in 2008, Capillary Technologies is India’s largest provider of end-to-end customer engagement solutions for retailers. Co-founder and CEO Aneesh Reddy discusses the company strategy, tradeoffs in the race to market, and the advice he follows. Please describe your company’s product and differentiation.

Aneesh Reddy: Capillary provides end-to-end customer engagement solutions powered by cloud + mobile + social technology to retailers and consumer-facing businesses. Our focus is on high-quality data capture, actionable analytics, instant cross-sell solutions, and instant gratification to generate a far higher ROI on customer engagement for retailers.

Our flagship product is called !nTouch, a cloud-based CRM solution, which is integrated with billing and point-of-sale outlets of retail chains. Using !nTouch, SMEs can access and use purchase data to entice buyers with loyalty programs and discounts. Last year we launched another product, TruTouch, which is an easy-to-use, self-serve style product for SME retailers.

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Ozonetel Innovates Voice Cloud in India

Editor’s Note: Serial entrepreneur Murthy Chintalapati left Silicon Valley, returned to Bangalore and launched Ozonetel in 2007 with a cloud telephony platform for voice apps development. As founder and CEO, he shares insights on growing a company and presents advice for entrepreneurs. What inspired you create Ozonetel?

Murthy Chintalapati: Being a serial entrepreneur, I always look for opportunities to build ventures rather than work for a paycheck. My first venture, Intoto, was built in Silicon Valley and later was acquired by Freescale Semiconductor.

When I moved back to Bangalore in 2005, I started assembling a core team with strong telecom and web technologies backgrounds. We had experience in implementing and deploying solutions around Avaya. We looked at the market opportunity of addressing 50 million small and midsized businesses (SMBs/SMEs) and 800 million mobile/landline voice users and connecting them over a platform.

Looking at India’s SME market, we realized they couldn’t afford the branded solutions, and they couldn’t own a team internally to maintain and manage the solutions. SMEs needed someone to host and manage various enterprise-class voice services. We created our own hardware and the telecom stack to host the service, and launched Ozonetel, a cloud telephony services provider. Fortunately we were able to self-fund the venture, so there was no need to convince an investor.

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Indian Software Startups Similar to Excitement of Late-90s Silicon Valley

Editor’s note: Sharad Sharma and M.R. Rangaswami are co-hosts of the NASSCOM Product Conclave 2011 (November 8-10, 2011), a must-attend event for software product startups. Now in its eighth year, more than 1,200 delegates from 600+ companies are expected to attend. Sharma and Rangaswami share with SandHill readers their insights on what’s happening in this dynamic market – and why U.S. buyers and software execs should keep the Indian startups on their radar screen.

One of the keynote speakers at the NASSCOM Product Conclave a couple of years back was Guy Kawasaki. In his recently published his book, “Enchantment,” he wrote that our Conclave was one of the most interesting that he had attended in the last few years because of the energy at the conference. And the energy this year is already really high. That’s because, in some respects, the Indian software products industry today is where Silicon Valley was in the 1997-98 time frame.

The Valley then was in a different era of entrepreneurship. There was enormous excitement about where the future of the world was headed and the role that the Valley could play in that. India is somewhat like that in the context of what’s happening now and the role that its software products industry can play in the economic future of India and the rest of the world. It’s a very exciting time.

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