Which has the most potential for enterprise-wide adoption: iPad or Cr-48?
This is a collaborative post with Nick Hamm (@hammnick), Director of Technology at Infowelders and David Schach (@dschach) from X-Squared On Demand. After a conversation via twitter, we decided to collaborate on a blog post (via Google Docs, of course) and are publishing it in our own blogs simultaneously.
With all of the hype around the pending release of iPad2 and how it has firmly moved us into the “post-PC era”, we had to take a step back and evaluate for ourselves whether all of the hype is justified, or if Steve Jobs’ mastery of the emotional sell has hypnotized Apple fan-boys and non-fan-boys alike into believing that we are in a reality that isn’t quite real, or even realistic.
The Case for iPad
The iPad is a game-changing device in many ways, but it’s main impact is as a consumer/personal technology. Apps are the primary driver that sell the hardware (or at least allows Apple to charge a premium for the hardware), and Apple’s AppStore is mostly consumer-focused. I’m sure Jobs had the vision that these devices could be used by business, but that was not their primary target with iPad Gen 1, and is still not their primary market with iPad Gen 2. However, Apple has quickly started to build a story around business adoption, and has started to gain adoption in businesses from startups to Fortune 500 companies. More on that later.
We have to remember that it didn’t start with the iPad – it started with the Palm. Stylus-input devices were the first widely-used mobile hardware, and one of the Palm Tungsten models had a phone built-in. Then Blackberry entered the marketplace and dominated the business mobile device market. The Blackberry could be standardized and controlled by IT. But with iPhones being purchased in the homes of business people, and those folks taking their newly found iPhone addiction back to their IT department, Apple has definitely made up for lost time. In fact, even though IT has lost most of its control over the company’s devices, the iPhone has gained grassroots traction to become the new standard-issue phone for many organizations. Why is this important? For two reasons: 1) The iPad is a giant iPhone, and 2) The same consumer-to-business adoption path is happening for the iPad.
Our companies consult businesses that have 20 employees and > 2000 employees. So we see a pretty wide array of IT cultures and standards. We also get to see how some of the decisions to use device X over device Y are made by the business. Very few of our clients are “.com tech companies” – most are traditional businesses that do anything from conduit manufacturing to healthcare facility management to spirits distillation and distribution. One would think that the larger companies would be slower moving and less likely to adopt new technologies, and in some cases that is true, but overall we are seeing a higher adoption rate of iDevices at the larger companies. This is somewhat counter-intuitive until you learn the reasons why. We have seen more than one instance where an executive either bought an iPad for personal use or received one as a gift, and within weeks (or days) mandated to IT that his/her field reps also use the device. This is a powerful demonstration that Apple has not had to focus marketing toward businesses in order to gain adoption within the enterprise.
Based on these comments so far, you may be asking why we even asked the question of enterprise-wide adoption in the first place. Well, there is an important caveat in these examples. The largest job role for business iPad adopters are mobile users. For most businesses this translates to sales and biz dev reps, who do a lot of presenting (slideshows) or data consumption (charts and graphs) and not as much data entry. The iPad’s focused functionality makes it ideal for less-technical users, and it’s stylish caché make it ideal to put in the hands of the guy or gal representing your company because it is a recognizable device that those who don’t yet have one are intrigued by and envious of. But those are not the benefits that are going to drive the business to collect the desktops and laptops from the rest of the employees and replace them all with iPads tomorrow. In fact, Apple has seen spikes in sales of their other more traditional hardware offerings to businesses since the iPad has been released, and in a lot of cases the iPad is only acting as a complementary device to the desktop/laptop for these users.
The majority of in-office workers at our clients interact with their computers in two ways: data entry (including, using Salesforce CRM as an example, writing notes from sales phone calls) and wizard-driven tasks (such as a call-center service representative). Both of these roles require efficient information-entry (using a keyboard or a mouse) and a powerful browser. The iPad has neither; yes Safari is good, but it cannot display Salesforce perfectly or deliver Flash, and that’s a deal-breaker.
iPad doesn’t have what it takes to root out the traditional PC/laptop from most business users and become their primary work device. At least not yet.
The Case for the Google Cr-48
We’ll start by saying that Cr-48 hardware is not game-changing – it’s little more than a netbook with a bigger screen. It’s the OS and concept of a cloud-only device in a familiar form factor that give us a glimpse into what the business devices of the near future could look like. Google knows as well as anyone that cloud adoption is happening at an exponential pace right now, both by consumers and by businesses. As more and more business applications are being moved to the cloud, including email, document creation, CRM, and other core biz apps, the need for a thick-client PC or laptop is quickly going the way of the Palm Pilot.
The main difference behind a cloud-based OS device like the Cr-48 and the iPad is that it comes in the same form that we are all used to – a laptop with a tactile keyboard (data entry), VGA (display) and USB (mouse/thumb drive) ports, and a browser that performs all of the full feature functions that we are used to performing. Users don’t drastically have to change the way they are used to interacting with this device. For anyone who has to do a lot of data entry, graphic design, document editing, or even just general typing, the choice between using the Cr-48 and an iPad as a primary input device is very simple – type on your Cr-48 while you’re watching The Hangover on Netflix with the iPad.
But for what the cloud OS brings to table as far as utility, it falls behind in the areas of flashiness and ultra-portability. It’s primary purpose is to do more with less hardware and IT infrastructure, not knock the socks off of the executives to which you are trying to sell to your widgets. The entry point to businesses for the cloud OS will be through the IT department, not through the executive team, which means that adoption could happen at a slower rate. You also need to have most or all of your business applications available in the cloud to replace your PC/laptop with a Cr-48, a scenario which is not yet reality for most companies today. We should also point out that the Cr-48 is just in the beginning stages of pilot, and probably won’t see the light of day in a production-ready device until late 2011 at the earliest. So it’s a little bit of an apples and oranges argument to compare the two devices. Which leads to our conclusion…
The Net-Net: Can’t we all just get along?
If there are two things that are clear from this debate they are: 1) The iPad is not ready to become the primary computing device for most business users, and 2) The cloud OS is still an emerging technology that will most definitely have an impact on the business computers of the near future. In our view, it’s not an all or nothing proposition. The iPad is the perfect device for certain types of business users that are mobile, have customer-facing responsibilities, or consume data/metrics (salespeople and executives), but even those two groups of users are unlikely to give up their desktops/laptops/netbooks. The cloud OS is the perfect solution for business users who require computing utility and still need a mouse and keyboard to effectively perform their tasks. This would seem to point to the conclusion that neither device has the potential to become an enterprise-wide standard. The advantage we can see with the cloud OS scenario is that one gets more utility for approximately the same price point. To IT, the iPad will be accepted because the mandate has been handed up-then-down; however, to that IT department itself, one that has spent blood, sweat, and tears moving the business to the cloud, the cloud OS will be a very logical choice. The war for standardization one way or the other (or a compromise to adopt both) will be decided in the board rooms between CITOs, CFOs, and CEOs over the coming months. And while Apple’s iPad has all of the unchallenged hype today, Google is quietly waging a campaign to take over the market share that Microsoft is losing due to Apple’s “post-PC” marketing pitch.
What are your thoughts on enterprise adoption of iDevices, cloud computing, and cloud OS? What are your thoughts on enterprise maintenance of traditional computing (OSX/PC/Linux) devices?
Appirio Now Backed by Sequoia Capital
Chris Barbin has released another blog post, explaining that Appirio is now backed by Sequoia Capital.
Looking at the SC website, I found more than a few of my favorite companies listed there:
SEED ($100k – $1M)
- All are also listed in higher categories
EARLY ($1M – 10M)
- CastIron Systems
- Gracenote
- Plaxo
GROWTH ($10M – $50M)
- eHarmony (love that Dr Neil Clark Warren)
PUBLIC (The success stories)
- 3Com
- Apple
- Cisco Systems
- Documentum
- E-Loan
- Electronic Arts
- Oracle
- PayPal
- SourceForge
- Symantec
- Yahoo!
- YouTube
Pretty neat, huh? This is a serious company with some seriously good research, apparently. So their backing of Appirio means that Appirio is in some really good company. (Note: Appirio is not currently on the list, which is consistent with Chris’ statement that the announcement will be official on Monday. Perhaps we shall see how much money Appirio landed.)
Appirio’s website lists Jim Goetz of Sequoia Capital on its Board of Directors and writes that “Appirio is privately held, with funding from Sequoia Capital, salesforce.com, and a select group of angel investors.” May we assume that Jim is the Team Lead for the Appirio project? Jim also works with Jive Software, Rhapsody Systems (purchased by Brocade, a former Model Metrics client), Palo Alto Systems, Widgetbox, and more.
So what does this mean for Appirio? Well, Chris lists a few areas:
- More Partners
- More Products
- More Talent
Let’s look at each in turn:
More Partners
I am constantly asking myself if my opinions about companies and business practices are influenced by my time at Model Metrics, and then I have to ask the follow-up: Is this something good to have learned or bad? Do I think that companies should emulate Model Metrics or not? Adam Caplan would frequently be heard on his phone in the middle of the office (I did learn that it’s really good when the President is in the thick of things instead of being off in a closed room) telling potential clients that all we did was Salesforce because we focused on one thing and did it well. That said, when Evan Smith and brought up the idea of partnering with Google, he dismissed it because it wasn’t Salesforce… and we all know that Appirio has gone much farther than Model Metrics has in the products realm, especially given Appirio’s fruitful partnership with Google. (On a side note, has anyone seen anything develop from Model Metrics’ Accelerate4Pharma presentation at Dreamforce 2007? Not one customer.)
What can we learn from this Google partnership? Diversifying can be a good thing. As long as Appirio can keep up with all its partner technologies (and given the people I’ve met there, I have NO doubts that it has the brainpower to do so) then it is in a position to bring some heavy hitter partners to its future implementations. For example, CastIron, another company in the Sequoia group, has great products with super capabilities.
More Products
This is pretty much a given. Appirio was founded as a product company (as voiced in the video “From Garage to Glory” from Dreamforce 2007). More money means more developers, which means more products. Some might remark that Appirio is building exclusively on Force.com (and they’d be correct–even if Appirio is building on Force.com AND Google, that still means that every product involves, to some extent, the Force.com platform) and that the lack of diversification is dangerous. In this case, I think that diversifying would be a dangerous thing. Salesforce.com is a growing company that is showing no signs of slowing down. With every product update, they are adding more features and more tools to help developers create their own features. It is this strategy that Appirio is betting on more than anything–and for the record, I would definitely go to Vegas on those odds.
More Talent
Some of my partners and readers (and now everyone else, apparently), know that I would give anything to work for Appirio. Their company culture fits in well with my mentality, and the people I have met who work there now have impressed me. There is a caveat, though:
Appirio is a product company. They are a company of developers. Yes, they have done some amazing things with standalone clients such as Dolby, but the system they built for them was not a CRM/business modeling application; it was a tool, crafted from the ground up for one purpose. It did not enable Dolby’s sales teams to sell more units, nor did it track revenue. I’m not saying that Appirio had nothing to do with that side of things; all I’m saying is that the demonstrations we have seen from Appirio have not shown off their talent in the practice optimization arena.
So as Appirio hires more talent, they will have to expand their offerings and improve their ‘pure consultant’ and Force.com Native Builder offerings. Again, nobody is saying that Appirio’s current staff can’t handle those things–they have done so with companies like Qualcomm and Borland) but the laws of specialization of labor dictate that at some point Appirio will have to add Consultants to its staff of Developers. (They call their developers Technical Consultants, but it’s just semantics at some point.) And nobody’s saying that they’re not planning to do this; Chris and Narinder are two of the sharpest knives in the drawer, and there is no way that I would ever think that I could come up with an idea before they would.
I learned some other lessons from Adam Caplan at Model Metrics: When Theikos merged with Astadia, he reminded us that Astadia was backed by so much VC that its people couldn’t really innovate because everything had to be run by the VC people. (When I left MM, Adam was actively seeking out VC money, but I’ll let my readers draw their own conclusions on that one.) Last month, I met a company president who wanted to build his application on the Force.com platform, but whose VC backer was willing to pay $200k for a .Net application versus just $8k. Everyone else in the room knew that spending $90k on a Force.com platform app would provide some amazing opportunities for revenue down the road, but he would not budge. I thought of Adam’s words and smiled.
(Lest anyone start thinking that I am starting a habit of picking on Astadia, let me say that I have NEVER said anything negative about them. Adam’s statement was likely uninformed, as I don’t think he knew who the VC was, and did not know anything about the particulars of the relationship. The VC I met for the application development project was pretty stuck in his ways, though, so we do know that there are some “my money, my way, regardless of whether it’s the right way or not” people out there. Perhaps that means that the clients should go find other money? I don’t know; it’s a rough situation. I guess that it’s important to keep perspective and know that you will make at least some money, though probably not as much as you might, with your current backer.)
Will Sequoia tie Appirio’s hands together, only releasing them when Appirio acts in full accordance with the Team Lead’s wishes, or will Sequoia trust Appirio and keep them on a loose leash, allowing Narinder and Chris to make the brilliant decisions that they’ve always made? I hope- and believe- that it will be the latter.
Bottom line: VC money is good, as long as it is the right kind of VC. Sequoia is that right kind of VC.
Congratulations, Appirio, on securing some high quality (and, I hope, high value) funding. I know that this will cement your place amongst the top product companies in the sfdcverse, and will enable you to vault to the top in the pure-implementation rankings as well.
Best of luck!
David
Salesforce.com Partner Infighting?
Chris Barbin, CEO of Appirio, recently wrote a superb article on Microsoft’s pathetic attempt at trying to appear that it was entering the SaaS market with it’s Dynamics CRM package. Among other things, Chris pointed out that Microsoft will give its partners a commission for bringing new SaaS customers to Dynamics CRM, but will also give some sort of bonus if those customers switch to on-premise systems. How pathetic is that?
The thing that caught my eye, however, was Chris’s choice of a website to use as an example of a company’s usage of “Microsoft’s attempts to put thin web front ends on on-premise solutions.”
This is Chris’s example of a company that (unwisely, apparently as far as Chris thinks) uses Microsoft’s veiled on-premise solution: Astadia Consulting, a competitor of Appirio’s. I don’t know much about Astadia, but I do know that they are a major player in the Salesforce.com Partner community.
Does this signal some bad blood?
It should be noted that plenty of companies use Outlook Exchange and don’t host it on-premises. Model Metrics, for example, another Salesforce.com Partner, uses Mi8 to host its server data. Sounds fairly SaaS to me…
