As you may recall, last month I set out to interview a number of on-demand CRM vendors on the topic of service reliability. As with the case of Salesforce.com's outages, many customer relationship management decision-makers were left wondering if the on-demand vendor they chose was able to provide them with the reliability they needed to keep their companies running at all times.
To get a fair and accurate picture of what vendors have to say about their own reliability this month, I bring you two more interviews, this time from NetSuite and SAP.
My first interview was via e-mail with Sean Rollings, Senior Director of Product Marketing at NetSuite
(www.netsuite.com) (news - alert).
RT: How would you compare your hosted offering to software-based and other hosted competitors?
SR: NetSuite is a software as a service (SaaS) leader. In contrast to many traditional software providers who are retrofitting their software and hosting it through third-party services on a customer-by-customer basis, NetSuite was built from the ground up as a Web-native solution dedicated to a SaaS-only delivery. In contrast to other SaaS and hosted solutions, NetSuite is managed in a multitenant environment for peak performance
As with the case of Salesforce.com's outages, many
customer relationship management decision-makers
were left wondering if the on-demand vendor they chose was able to provide them with the reliability they needed to keep their companies running at all times.
and cost effectiveness for the customer. In contrast to traditional software solutions that provide upgrades every three to four years, NetSuite provides a rapid rollout of new features and functionality for all customers with one major and two minor upgrades annually. The bane of traditional software is its rigidity. NetSuite's NetFlex technology platform makes NetSuite the most customizable ASP, with point-and-click configuration, rich customization, Web services to extend NetSuite to legacy and third-party applications, and the Applications Program providing third-party applications built for seamless integration with NetSuite as the system of record. All NetFlex customization and extension upgrade seamlessly with every upgrade.
RT: What is an acceptable amount of downtime for a hosted provider?
SR: NetSuite is the only SaaS vendor to provide a 99.5 percent uptime guarantee or money back, which was effective to all of NetSuite customers since April 2004. Since then, NetSuite has actually delivered 99.9 percent uptime. This is the acceptable downtime, but it would be great to see other vendors at least guarantee some level of uptime to
RT: What sort of remedies should a customer seek as a result of excessive downtime?
SR: NetSuite guarantees our uptime and has a standard procedure for investigating downtime and, when warranted, being credited per the terms of the guarantee.
RT: At what point should customers consider switching hosted providers?
SR: Under the following circumstances:
' When the software does not manage the business processes for the company and/or the industry either through standard or custom functionality;
' When downtime becomes excessive ' this threshold of business continuity will be very low for any company;
' When the capability of the system was oversold by the vendor;
' When a growing business crosses the threshold to more sophisticated business processes, reporting and/or compliance; and
' When they are geographically challenged by currency, issues of international trade, language, etc.
RT: Has your hosted solution been down yet? Please detail.
SR: We have exceeded our 99.5 percent uptime guarantee by delivering 99.9 percent uptime every month since our program was introduced in April 2004.
RT: What are you doing to ensure zero downtime?
SR: By offering the following:
' Superior architecture of the database, application server and application;
' Smart loading servers for peak performance; and
' Close monitoring of server and application performance with quick strike remedies before downtime occurs.
RT: Do you see downtime potential growing as the customer base does?
RT: How is your on-demand customer retention rate?
SR: Above the industry average.
Next Up: SAP
Next, I spoke with Ralf Von Sosen, Vice President, CRM Solution Marketing at SAP (www.sap.com) (news - alert). The company recently introduced an on-demand product, so I was intrigued to get some more information.
SAP is targeting their hosted offering to large companies, not necessarily competing with Saleforce.com. SAP is helping companies manage the tactical opportunities they have today while keeping true to the strategic initiatives of CRM. Most small companies, of course, don't have such concerns ' yet. Perhaps the benefits of this thinking shouldn't be limited to the largest of companies. Even small businesses can benefit from SAP's offering as they allow companies to act immediately and grow strategically.
SAP says they have a long-term vision of the customer-centric enterprise while providing a seamless migration path from on-demand to premise-based systems such as the MYSAP CRM Suite.
The core components of the newly announced SAP CRM On Demand Solution are as follows:
' Sales on Demand;
' Service on Demand; and
' Marketing on Demand.
The first of these solutions has already been released, while the latter are coming within the next two quarters, priced at $75/user/month/module. Buying all three at the $125/user/month rate, proving to be the better deal, gets you the entire suite. The average customer purchases 100 seats, and by doing some rudimentary math, I estimate a customer would spend approximately $150,000 per year for all three modules.
You might think that truly large companies have more than 100 seats. SAP explains that they will sometimes sell their solutions to a division of a Fortune-class company.
SAP decided that the multitenancy model, which is frequently used in hosted CRM solutions, was not an ideal fit for what they were trying to accomplish. Instead, they decided to go with something they call 'isolated tenancy.' In the former scenario, multiple users share the same application, however their data are isolated from other customers. In the latter case, each company gets its own instance of the software to run.
The reason for this slight change is to generate increased security, reliability and uptime.
So while Ralf was telling me about his company's new service, I couldn't help wondering ' what about the uptime, Ralf? After all, uptime is the reason I decided to focus on the topic in this March issue.
Thankfully, after Ralf explained a bit more about what his new on-demand product can do, he addressed the topic gracefully, saying 'I can look you squarely in eye and say we have had nothing but zero percent down time'ever.' Of course, the humor here is that the service wasn't even 30 days old when we talked! Still, it's not a bad start.
Ralf said he wouldn't have thought reliability would be an issue a few months ago, but now it's on the top of everyone's list. This has changed the conversation with some of his larger enterprise customers.
I asked, then, what is an acceptable amount of downtime for a hosted provider?
His answer? Zero. Which is what I (and you) had hoped for. They do guarantee 99.5 percent uptime, but will have scheduled downtime like others. Ralf mentioned that SAP partners with IBM services, which host their solution, helping to ensure uptime.
Siebel (now Oracle) also uses IBM and says the same thing about their hosted solution. Ralph mentioned that post-acquisition, Oracle might not be thrilled with their software running on IBM's DB2, as Oracle's bread and butter database competes with DB2.
On the matter of remedies, Ralf replied that customers are free to switch hosted providers, as there are many choices out there.
So there you have it. Over the last few months, we have had comments from the on-demand CRM world on what most every company in the space is doing to ensure their services stay up at all costs. At this point, anyone else who has downtime will become a target of immediate industry scrutiny by the press. There is immense pressure on all to make sure their services stay up and that there are dramatic differences in how many of these companies are approaching the uptime issue. If you are interested in keeping up with uptime and other aspects of the CRM industry, feel free to keep reading my columns and my blog at Tehrani.com.CIS