The Wave – and Why Central Desktop is Happy but Nonchalant

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The other day I got an email from Isaac Garcia at Central Desktop to let me know that they’d been included in the August 2009 Forrester Wave for Collaboration Platforms which, not surprisingly, lives behind a paywall (and will cost readers USD1749 – for a 14 page document!) but which I’ve been privy to in its entirety.

The report is apparently a “66-criteria evaluation of collaboration platform vendors”. Anyway, one of the vendors profiled, and the only pure play SaaS vendor to make the grade, was Central Desktop.  

First of all, it’s a validation of the Central Desktop approach and congratulations go to them, but I find it a little disconcerting that the report is both skewed towards on premises applications AND the large corporate end of the market. One interesting concept the report brought up was the relative approach different players bring to organisational collaboration. The three backgrounds, content, traditional and “new-breed” all approach the area from different perspective as details below;

At the end of the report, Forrester plotted the vendors they’d looked at along two axes – the first being the breadth of the current offering while the second was Forrester’s analysis of their strategic strength;

I took a bit of a deep dive into how this analysis was aggregated and I was left a little cold. One of the criteria to assess current offering strength is that the product has cross platform support – companies are given a ranking from 1 to 5. One could be excused for expecting that Central Desktop, being a web based application, would score the highest marks in this area – unfortunately they didn’t, because their application cannot be installed on a plethora of systems. What Forrester is actually measuring is cross OS support but their methodology is hugely skewed in favor of the on-premises vendors.

Why though, returning to my original theme, is Central Desktop the only pure play SaaS vendor in this report? Is it because of a dearth of midmarket offerings or is it a skewed approach towards the analysis on the part of Forrester? I’d have to contend that there’s a little bit of both here – and, while that’s great for Central Desktop in the short term, in the long term it’s harm all midmarket players as the traditional analysis houses totally miss the boat on these vendors.

Bucking the findings of the report somewhat, Garcia was pleased to tell me of the positive signs they’re seeing inn their own performance. Central Desktop is seeing rapid growth in what they class as their midmarket products (those aimed at 100 – 1000 users), while overall revenue continues to climb quarter on quarter. Some of this of course is the trickle down effect of more market awareness of collaboration platforms over all – as SharePoint and Lotus continue to make inroads at the bigger end of town, so to do lower tier vendors like Central Desktop begin to ramp up sales.

Some of it however is the smart move to target smaller organizations. Garcia notes that “there appears to be stiff competition and strong embeddedness of SharePoint in companies and departments with MORE than 1000 users”. But he also notes that, where they’ve managed to gain a foot hold with slightly larger organizations (750 – 1200 users) it does so “with a strong blessing from IT”.

Also interestingly, and somewhat counter to what Forrester contends, Garcia noted that they’re starting to see larger deployments, perhaps indicative that SaaS is getting mainstreamed within the enterprise. Central Desktop is sticking to it’s pure SaaS approach and, despite requests from customers, is refusing to deploy Central Desktop as an on-premises solution. They believe that multi-tenancy and a businesses specifically built to create and deploy SaaS products, gives them an advantage over the traditional vendors.

Not surprisingly given his comments, Garcia states that “while we are happy and glad that we were included in the Forrester Wave – it is clear that the report is heavily biased towards vendors that perpetuate “the old on premise” delivery models.” Of course this dearth of traditional analyst reporting on SaaS solutions is hardly isolated to collaboration software. As other commentators have pointed out, without a natural revenue stream from the SaaS players, traditional analysts are more than likely to leave them behind… some would say in doing so they leave themselves behind.

Update: talk about Forrester, they are seeing some “big name” departures…