Google launched an application marketplace today comprised of services from third-party providers that integrate with the Google Apps ecosystem.

The news has been anticipated for some time. In particular, it shows how much Google is embracing open-standards and leveraging its search and Google Apps platform to attract third-party developers.

The reality is that broader social and cloud computing trends continue to evolve faster than most enterprises are able to absorb. It may be years before many organizations are comfortable with and ready to adopt either of these technologies strategically despite apparent benefits.

However, that doesn’t mean that it’s not important for organizations to closely track both of these leading computing trends (both have solid double digit industry growth) and understand the emerging technologies that are likely to shape their use in key business functions in the near future. In fact, quite the contrary, particularly when it comes to Enterprise 2.0.

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Encoding.com,

online video encoding

Metamorphic Ventures

Zelkova Ventures,

Dave Morgan,

Allen Morgan.

Launched in September 2008, Encoding.com provides a cloud-based, video encoding SaaS offering to let users host and encode user-generated and premium video. The company encodes an average of 30,000 videos per day for a variety of well-known media and technology companies including MTV Networks, WebMD, Nokia, and MySpace. To date, Encoding.com has encoded more than four million videos since its launch.

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Organisations will expand their IT systems during the year as part of a wider plan to improve efficiency across their businesses, the report forecast.

Andy Morgan, PwC partner, said: “Carve-outs from financial institutions and smaller infill deals are expected to prevail within the FinTech sector over the next 12 months but Merger & Acquisition (M&A) activity will require creativity in terms of deal structures to achieve results.

“The real hotspot in the world of applications is software-as-a-service (SaaS) as organisations see the benefits of moving large-scale software expenses from their capital budget to their operating budget, which will certainly drive increased M&A activity.”

Further findings from the report suggested that heads of businesses now view the “digital transformation” of their organisation to be a priority.

Previous research from PwC showed that the number of deals in the global financial technology marketplace fell by more 60 per cent during 2009 when compared with figures from last year.

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Fujitsu Limited and Fujitsu System Solutions Limited today announced the launch of software as a service (SaaS)-based solution to support the operation of clinical drug trials conducted by pharmaceutical companies. The new service, called tsClinical, is now available in Japan.

tsClinical is an on-demand SaaS-based solution that provides a data management system for results from medical cases necessary for clinical trials of new drugs, according to trial length and scale, through a network.

The new service eliminates the need for users to deploy an individual case data management system for each clinical trial, thus speeding up the trial process, eliminating system deployment and maintenance costs, and minimizing the workload associated with clinical trials.

tsClinical has already been deployed by Bellsystem24, Inc., a Japan-based organization which provides support services for clinical trials. In addition to existing support services, Bellsystem24 aims to deliver enhanced CRO(1) services by providing new services, connecting its pharmaceutical customers with a data management environment through SaaS.

Pharmaceutical companies, healthcare institutions, and CROs have been conducting a variety of clinical trials to test new drugs for lifestyle-related diseases, infectious diseases, and healthcare maintenance, as well as to determine the side effects of drugs already on the market. However, during these clinical trials, it is important for companies to collect and manage data containing information on the effectiveness or side effects of a drug, both quickly and accurately. Companies must also employ a case data management system that complies with related regulations for each respective clinical trial. As a result, it has become a challenge for pharmaceutical companies to quickly deploy case data management systems to conduct fast clinical trials while curtailing system development costs.

To optimize clinical trial operations during new drug development, Fujitsu is offering an on-demand SaaS-based data management system, which previously was only available as a software package.

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The survey of more than 400 SMBs across the United States finds that nearly 30 percent of them plan to implement SaaS solutions in 2010 to lower costs and maintain their competitive edge. That’s up from 22 percent and 14 percent respectively in the two prior years.

Thirty percent of SMBs say they intend to implement managed services solutions in 2010. Since 42 percent of SMBs do not have a formal IT department, relying instead on workers handling IT needs on a part-time basis, the managed services model is ideally suited to fill this skills gap.

The CompTIA study also indicates SMBs are placing increasing importance on technology solutions that drive revenues, produce immediate results to the bottom line and have a direct, positive impact on the customer’s experience. This is reflected in their growing adoption of enterprise resource planning (ERP), customer relationship management (CRM) and other such solutions in 2009.

“Between 70 percent and 80 percent of the SMBs we surveyed consider the usage of ERP, CRM and online e-commerce capabilities as strategic to their business,” said Tim Herbert, vice president, research, CompTIA. “IT solutions that are tied to instant return on investment in business communication and customer outreach efforts have the highest likelihood of adoption.”

At the same time, SMBs are looking to “stretch the buck” by making better use of existing technologies, people and budgets. Though SMBs are somewhat upbeat aboutbusiness prospects in 2010 – with seven in ten expecting positive revenue growth – they also expressed a desire to keep current IT systems operational for a longer timeframe. SMBs are challenged by lean IT budgets and are looking to reduce the complexity and cost of maintaining their IT infrastructure. The inability to integrate existing legacy products and services with emerging technologies also causes them anxiety.

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On the one hand, who could blame IT for being reluctant to adopt best-of-breed software? The typical enterprise software installation involved lengthy rollouts of 18 to 24-months, cost millions of dollars in hardware and required countless hours of IT resources to deploy and maintain onsite. So, limiting deployment of non-ERP systems seems a logical way to standardize and limit burdens on already scarce IT resources.

Unfortunately, as increasingly frustrated finance directors learned first-hand, IT’s unwavering stance on system consolidation often failed to support the needs and business objectives of finance or any other functional department. As a result, finance’s productivity and performance was often hindered – not helped – by the company’s overarching IT strategy.

Software as a Service (SaaS) has changed all this. By delivering application functionality as a globally accessible, web-based service, SaaS – or On Demand – has bridged the gap between business and IT – enabling finance directors and other business line executives to access the functionality required to meet and exceed their goals while still toeing the line on corporate IT strategy.

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During 2009, VARs that promoted on-premise solutions were challenged to redefine their value-add since much of what they had built their business and expertise around was becoming commoditized. The question for many was how to participate in cloud computing in a way that allowed them to make money.

Platform as a Service

The answer: Platform as a Service (PaaS) will likely become an increasingly good opportunity for Solution Partners to leverage the cloud, continue to add value to their customers, and make money in 2010. Here is why.

Platform as a Service (PaaS) such as force.com and Google app engine provide an on-demand development environment that reduces development environment complexity, time and cost so that developers can focus on building applications. Some are taking it a step further and focusing on the needs of Solution Partners, providing very innovative ways to help them expand their business.

The current trend is improving time to market and time to revenue which is greatly dependent on how quickly you can build and deploy an application. The opportunity to add value now is not so much in technical competency but in a Partner’s understanding of the business problem that needs to be solved and then building that application in a way that adds the most immediate value to the business.  As Heather Margolis pointed out in July 2009, SaaS will drive the emergence of a new type of partner, who has strong business domain expertise  and who traditionally may not have focused on providing technology solutions.

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2. Real business value in SaaS will continue to improve, be better understood and measured more explicitly. There is a growing understanding of the difference between an ASP implementation of a standard premise-based application and a service that designed for the delivery medium that is embodied in SaaS. It is much more than technology or an offset of costs for infrastructure and resources. That said, the metrics on both the vendor side and end-user side of the SaaS equation need more clarity and uniform acceptance. As a buyer of a SaaS offering, I shouldn’t care if it has been adopted by hundreds or millions of users. What matters is who is using it successfully and what is their context? If I am going to base a critical part of my business on a SaaS offering, I need to understand if the lifetime value of customers is substantially greater than the cost of customer acquisition. I need to have confidence that the adoption of the service is higher than abandonment. I need to know the service will have enough value to continue. Having that confidence is a product of a conversation between the SaaS vendor and their customers/end-users. It takes some real thinking on the part of the vendor to engage in that level of collaboration – but we will continue to see the most successful services providing a model of this behavior and inspire others to do likewise.

3. Service ecosystems will rise. Best case SaaS should be designed to meet the market embodied in the Long Tail. As we and others have said many times, the economics of SaaS and efficiencies of modern development cannot really be leveraged without a good-sized market. You can often reach sufficient market size by targeting your service to the second and third tier markets in a vertical but the time required to reach positive cash flow in SaaS can still cause many problems. Whether a specific service can be sold to a wider market or not then – it is wise to consider an ecosystem approach and I believe many will in the coming year. Salesforce and Google both exploit their ecosystems to bring a broad range of services together on their platforms and as was mentioned in our first point, cloud infrastructure vendors are heading in the same direction. In verticals, I can imagine a focused service teaming up with a general operations package for instance – especially one that could be pre-configured and integrated to the vertical application providing a “suite” for users. This can give users the benefits of single sign-on, data sharing, perhaps a lower total cost (assuming the vendors recognize the value in packaging joint services) and a “desktop” for most tasks they do everyday. In fact, in the long run, I don’t expect to see many “stand alone” services – it just doesn’t make sense for the users or the vendors. We will see a lot more applications “joining forces” strategically or being acquired in the next year by integrating, combining user data pools or through “Mash-Ups.”

4. New services will focus less on “doing it all from day one” and more on their roadmap. In the “brave new era” of SaaS, one of the big impediments of developing a service was all the decisions you had to make and all the business operational aspects you had to have a handle on to arrive at requirements and start development. Many entrepreneurs felt they were being asked to either start with the equivalent of the original Wright Flyer or with a development burden so large they could never reach a positive cash flow with a reasonable investment. Now however, there is a wide array of mature, tested services that can be easily integrated into a service product to provide standard approaches to operations, integration, sales, and many other business and technical requirements. With an extensible architecture, there is a great value in picking “best of breed” services to do the “dirty work” while focusing custom development work efficiently on the real value proposition for a service. The time to market and up front investment decrease dramatically and the risk of running out of cash on a reasonable investment is contained. As none other than one of the leading investment groups has proclaimed, “Less is more!” And rather than worry about “lock in” – thoughtful entrepreneurs will realize at the point in the road where the cost of the integrated services begins to be a part of overhead that is worth investing some development time in – current development practices can allow extensions to the application without an expensive rewrite.

5. Integration requirements will drive standards for service-based communication and interaction. If cloud “ecosystems” are going to rise, if online services are really going to dominate the market for innovative products in the near term, standards for integration and service-to-service interaction need to be recognized and grow dramatically. Despite the continuing whines of a few holdouts – no serious vendor of online services should be considering parallel deployments – both on site and across the Internet. Developing a product that can address both markets eventually becomes “SoSaaS” – a product so hobbled by its split identity it cannot truly leverage the value of either delivery model. Instead, with an extensible Service-Oriented Architecture (SOA), open APIs and standard integration tools, online services will offer ways to leverage local data, applications, and other online services in ways that are in the end much cheaper and more reliable than traditional custom integration services. This doesn’t mean SaaS vendors won’t offer on-site applications – but in many cases those applications will be hubs for addressing local integration needs and compliance issues.

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