Yesterday I had a great conversation with one of the founders of Appirio, a new age services organization founded in 2006. They are an 80-person company with an additional 20 people offshore through a partner. Their original investors include Salesforce.com along with a couple of angels. More recently Sequoia capital invested in them.
Appirio is a unique company for a couple of reasons: they are a Services & Product organization, rolled up into one and are completely focused on the On Demand space.
Their philosophy is well documented and covered in their explanation of “Services 2.0”:
“This new breed of specialized firms fully embrace SaaS with complementary business and technology consulting, productized intellectual property, and support services via flexible social networks will be disruptive to traditional Global Systems Integrators (GSI)- such as Accenture, IBM, Cap Gemini, and Infosys – who are just as addicted as the ISVs themselves to revenue streams based on the on-premise install base.”
This whole Services 2.0 theme is very interesting. There has been, for what now seems to be forever, a conversation among the Services 1.0 players on how to break the direct relationship between the number of bodies and their revenue numbers. The current model is steeped in the FTE / Body count business. Many of them are trying to get some IP into play particularly for aspects that are often repeated amongst client.
In this very scenario Appirio has been able to execute on the vision, creating products/solutions/IP like Connectors between Salesforce-Google, Salesforce-Facebook & Salesforce-Amazon etc. The very reasons that On Demand is great for customers makes it invaluable for IP/product developers. They only have to focus on the solution and not worry about the infrastructure / software set up… etc. – i.e. all the non value added tasks. (A question that arises here is that though this does enable companies to build and take to market solutions/products faster, at the same time it reduces the barrier of entry for other players to come and create something similar and undercut on cost…)
The whole difference between Services 1.0 & 2.0 companies is captured well in the table they provided (via Sandhill.com):
Currently Appirio is focused on the services side on Salesforce.com & GAPE (Google Applications for the Enterprise). On the product side they have a vertical application developed for Professional Services organizations on the Force.com platform in addition to the connectors between Salesforce-Google, Salesforce-Facebook & Salesforce-Amazon. Another offering that they have is the “Viral enterprise” which leverages Facebook specifically for recruitment… etc.
They currently have around 1600 customers for their solutions / products business and another 120 enterprise customers on the services side.
Areas that they might look at expanding into in the future are – Amazon,Adobe, Facebook, Workday, Intact, Google App Engine…etc. Mostly solutions that meet their fundamental deicing as defined in the Services 2.0 piece.
Some Customer Success Stories:
- Large Enterprise – Qualcomm – They implemented the Salesforce Service/Support Module.
- Medium Enterprise – Genentech – They implemented 1500 seats of Google Calendar
- Small Enterprise – CRC Health – Developed patient intake system on the Force.com platform
Their view of projects:
- Tied to an Outcome
- Spend more time on business process/ user adoption (Parts that are more important to the end user, hence trying to make the projects more successful)
- Lower/Less investments
- Bring best practices across different client groups – Leverage packaged IP
- Duration – Short Project Cycles , each with its own justifiable delivery / ROI, typically 4 weeks – 3months
- Work with both the IT & the business, Business alone will not be able to execute they need the support of the IT team
Suggestion to CIOs
Get started now! Do a portfolio analysis of your current application infrastructure & framework , identify some of the needs of the future and analyze the same to see which of these makes sense to be moved to an “On Demand” model. And move it now.
I am a believer
I believe in both the promise of “On Demand” and the need for integrators / SI’s with a completely new view to IT & Innovation. I also believe in the model of delivering results and leveraging technology to provide value to the customer. On the On Demand model, I don’t think it is suited for all customer use cases and don’t think all applications will be on an public on demand model. Its going to a hybrid state , with loosely connected systems and easy to use information aggregation / processing / mash up capabilities based delivery tools.
(Guest post by Prashanth Rai)