Gartner Report on Software as a Service

Worldwide total software revenue for software as a service (SaaS) within the enterprise software markets is projected to surpass $5.1 billion in 2007, a 21 percent increase from 2006 revenue, according to Gartner, Inc. The market is poised for strong growth through 2011, when worldwide revenue will reach $11.5 billion. (Within e-learning and Web conferencing, SaaS accounts for more than 60 percent and 70 percent of total market revenue.)

“SaaS adoption is highest in applications that support simplified, common business processes or large, distributed virtual workforce teams,” said Sharon Mertz, research director at Gartner. “Ease of use, rapid deployment, limited upfront investment in capital and staffing, plus a reduction in software management responsibility all make SaaS a desirable alternative to many on-premises solutions, and they will continue to act as drivers of growth.”

“Major on-premises software vendors are re-architecting their application stacks to service-oriented architectures. Their customers will invest in migration for those processes that are complex or proprietary, but they also have an opportunity at this juncture to evaluate whether SaaS is an appropriate alternative for other aspects of their business,” Ms. Mertz said. “Small and midsize businesses that have insufficient resources to convert their applications will also find SaaS an attractive 21st-century solution to their legacy systems.”

Thanks,
David Chao
The Web Conferencing Expert

Cisco and Unified Communications

According to Barry O'Sullivan, SVP of the voice technology group at Cisco Systems, the core of UC is the network itself, which the company sees as the unifying force behind the convergence of IP telephony, e-mail, instant messaging, contact center applications and other technologies. (This is in-line with my Collaboration Predictions for 2006. So I'm 2 years off...)

"At Cisco, we believe we're entering the second phase of the Internet, which is all about collaboration. And the key underlying technology to collaboration is unified communications," O'Sullivan said during the Web conference.

The opportunity is huge and continuing to grow, he said, the total value of the UC opportunity this year alone is approximately $30B.

Cisco's approach to UC has to do with collaboration and collaboration is all about connecting people, no matter what device, operating system or telephone is used, he said. He stressed the importance standardization.

"Collaboration really demands openness, and that's really a very important part of our strategy. Our vision is all about collaboration -- empowering people to collaborate effectively, anytime, anywhere, from any device," O'Sullivan said.

Cisco is looking at the UC market from the perspective that the network (as a platform) could bring the heterogeneous world together, he said.

In developing UC products and services (the company's focus on services grew with the acquisition of WebEx in May 2007), Cisco is driving its engineers along four key design principles, Burton said.

1. Build UC services as a set of virtualized capabilities.
2. UC systems built on Cisco Services-Oriented Network Architecture (SONA) for multiple layers of security to protect against viruses, trojans, malware, and protecting user identities and corporate data.
3. Simple and ease to use.
4. Technology needs to be open.

"We really focus on standards, so we build our UC system on SIP, on XML, on Web services," as well as a plethora of other standards, Burton said.

The end goal is a rich communications experience on any device, he said.

According to O'Sullivan, it's the network that makes that work and really drives a better application experience.

Thanks,
David Chao
The Web Conferencing Blog

Cisco Buys Latigent

Cisco Systems has announced that it is buying Latigent, a maker of call center reporting software to strengthen its own software business. Financial terms have not been disclosed for this acquisition.

This is the fifth acquisition that Cisco has done in 2007.

• February: Reactivity ($135M) and Five Across ($ n/a)
• March: WebEx ($3.2B) and Utah Street Network ($ n/a)
• April: Ozon ($ n/a)
• May: Broadware Technologies ($ n/a)

Latigent makes software that converts call center data into reports so that executives and other staff can improve customer service or get insights from customer behavior.

Latigent’s software specializes in extracting data from Cisco and Avaya communications products. Cisco executives said the company plans to integrate Latigent's products into its own customer contact technology and eventually have those products communicate with CRM applications.

Thanks,
David Chao
The Web Conferencing Expert

AT&T Buys Interwise

As predicted, 2007 has been a year of consolidation for web collaboration companies/technologies.

Google and Marratech for undisclosed amount
Cisco and WebEx Communications for $3.2 billion

Now, AT&T acquires Interwise for $121M. Interwise has about 130 employees with $20M in sales revenue and based in Cambridge, MA.

AT&T said that it expects to retain the Interwise management team, which is headed by Frank Zvi, co-founder, president, and CEO of Interwise. The company's domestic and international operations also are expected to be retained, AT&T said.

Thanks,

David Chao
The Web Conferencing Expert