25 May 2007, 11:59PM PT
15 May 2007, 12:00AM PT
Closed: 25 May 2007, 11:59PM PT
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SaaS and wireless technologies are indeed the current buzzwords in the industry and, as pointed out in the question, are on a converging path. Access over wireless media is what can perhaps give SaaS the impetus it needs for mainstream adoption.
Opportunities for applying wireless SaaS:
I see tremendous opportunities for wireless SaaS in the following areas:
1. Customer Relationship Management (CRM) - Salesforce.com has already entered this arena with its acquisition of Sendia. CRM as a wireless SaaS offering should see explosive growth especially in emerging markets.
2. Remote Helpdesk - Solutions such as Helpdesk Pilot (a web based help desk software and support ticket solution) could enable the product for wireless access. Now that would be answering the prayers of people in the field.
3. Enterprise Resource Planning (ERP) - Allows the stakeholders to receive up-to-date information on enterprise operations as and when required through the use of modern communication devices like mobile phones and laptops.
4. Logistics and Supply Chain Management (SCM) - Allows stakeholders to achieve mobile real-time coordination.
5. Self-service Human Resource portals - Would allow corporate employees to manage data about themselves from any location.
Evidently, most of the opportunities are focused on enterprise-level applications and this is where wireless SaaS can really flourish. I am not very sure about the future of Office-like applications served as SaaS. It would indeed work if the mobile device in question is a laptop, but not otherwise.
Investment opportunities in wireless SaaS:
I see three players - each of who has a significant part to play - in the wireless SaaS equation. They are:
I believe that wireless SaaS solutions will be demand-pulled (by end users) rather than vendor-pushed. End users would have an endless choice of mobile devices (laptops, mobile phones, smart phones, etc.) over which they could access the service. Once the initial adoption hesitancy is overcome, end users would increasingly demand more features from SaaS vendors. For vendors, a key to overcoming the initial hesitancy would be the enabling of a seamless transition experience from a rich web application to a mobile application.
Wireless service providers, the enablers for wireless SaaS, represent a major obstacle. The chief concern of these providers would be, as can be readily guessed, bandwidth issues. Wireless service providers would be adamant about knowing whether the information traveling over the air is data, voice, or video - after all it is their investments and revenues in question. With all the debate raging over net neutrality, they could turn out to be the spoil-sports in this equation. At the moment, I wouldn’t bet my money on them.
The SaaS vendors have their work cut out. They would need to invest in developing a smart mobile interface that would ideally identify the type of device connecting to the service and serve a relevant user interface. The other areas of concern are data optimization and data security. It makes business sense for SaaS vendors to integrate mobility solutions from leading vendors rather than trying to build the same in house. For example: Salesforce.com bought Sendia, a developer of mobile technologies, for $15 million in order to build a mobile interface to their AppExchange platform.
I predict that companies who are into providing such mobility solutions stand to gain from wireless SaaS going mainstream. These are the companies I would bet my money on.
The twitter model of communication between web services and mobile devices is the next big thing. Granted, Twitter is probably a fad, but the model it has created is going to be adapted and adopted by the enterprise turning it into the next big thing in the wireless SaaS tools in the enterprise. Alternate uses of services like these will become for calendars what RSS has done for e-mail - that being a displacement technology.
Secondly a reverse twitter model will also be big. As updates are sent to the server from phones - notifications will be dispersed to groups of mobile phones. This will change how corporate communication will be done.
Third - companies like Salesforce.com will be going mobile within the next year bring CRM to the phone. These services will probably require higher end phones but as the cost of these devices decrease the adoption rate of mobile SaaS services like CRM will increase.
Other models currently in affect are mobile marketing notifications. The coolest ones are geo-spatial based meaning that when I walk in front of a Starbucks in Des Moines, Ia I get a notification that coffee is on sale today and they have a special roast available.
And last - content delivery will always be at the forefront. If you can get content (audio, video, and text) to wherever the consumer wants it you have an advantage. On the horizon is mobile video. Within the year video will go mobile. Services like YouTube will be offering many more mobile services and there will be many copycats.
If I were to invest in a company I would look into the geo-spatial / location-based services. Many of the other areas will be pursued by existing companies and will likely be an area where startups will be unsuccessful. But if you are first to market in some of these markets you will be targeted for acquisition.
Digging deeper into the wireless services provider part of the wireless SaaS equation, I believe that the way forward for major telcos is to transform themselves from being pure hardware-based companies to being a hybrid of hardware- and software-based services companies. That seems to be the only way they can fight the increasing levels of telecom commoditization. Again, it makes business sense to buy software-services capabilities rather than developing them in house. British Telecom is one telco adopting this route with its next generation IP-network and through its acquisitions.
Statistics suggest that there are more than 1000 SaaS vendors in existence today with 90% of them churning out less than $15 million in revenue.
For a telco, a possible approach – just to test the feasibility of the concept without incurring a huge capex – could be the acquisition of a mid-tier SaaS vendor, followed by integration of the SaaS product with the telco's wireless network services, and finally offering the solution as a value-added service to its customer base (more likely to a corporate). This approach makes more sense rather than trying to buy outright and integrate a top-tier SaaS vendor such as Salesforce.com.
Also, for SaaS to work over wireless, the underlying network should have excellent QoS (Quality of Service) in terms of steady bandwidth, network latency, and packet loss. This QoS can be assured only by the telco.
If I were a mid-tier SaaS vendor eager to go wireless, I would probably try to strike such a deal with a major telco. I am quite sure that if both parties work towards common interests the outcome would be revolutionary. What would follow next is a mad scramble for SaaS vendors by the telcos.
As an investment opportunity, I would place my bets on mid-tier SaaS vendors in the short to medium term and on the top-tier SaaS vendors in the long term.
The use of wireless technology continues to be a growth business with more adoption in developing and maturing countries and many users in developed and mature countries now owning multiple handsets.
One of the other great success stories for mobile business has been the Blackberry email service. The push for people to be always available has now proven to be so successful that companies are asking employees to turn off, and in some cases surrender, their “Crackberries” to ensure active participation in meetings.
The success of Research In Motion’s (RIM) Blackberry service is one of the first instances of the convergence of mobile phone technology and Software as a Service (SaaS).
What then are the growth opportunities for this space of WiSaaS?
Environment Opportunities
With handset vendors such as Nokia recognizing the potential markets in Africa they are flexing their handset features to keep cost down and as such are preparing for a new boom in more feature rick handsets down the road. This coincides with solar and wind powererd base stations in Namibia and South Africa that bring the roll out and operations costs down. It has been long predcited that coutries like Kenya will jump directly to wireless usage opposed to and fixed communications services.
This will create opportunites for the mobile handset as a business platform and there are some players ready to seize that opportunity.
Platform Opportunities
I would break down the current WiSaaS vendors into four segments
For each segment I have selected my favourite vendor.
This is the space currently dominated by Blackberry but there are many push mail services available today. My choice is Flurry. I find the service one of the more flexible services as I can register multiple email services that can be pushed to the Java client on my handset. As a user of Gmail, Yahoo and company email which I use to separate my business, personal and online presence parts of my life I find it particularly useful to be able to aggregate those into one service when I am mobile.
The service is very easy to sign up for and supports every country that I am likely to travel to. As I use pre-paid SIM’s to cut down on roaming costs. This means that I could register each SIM and have the service available all the time in any country.
Email is the platform for business today. It will continue to be the platform for many years to come and to be able to have something scalable and flexible for the emerging markets will be a great opportunity. I think that Flurry is well placed although I did stumble across it rather than readily identify it as the service of choice.
The IM ecosystem that represents the preferred communication channel for many Generation Me users will evolve into a more mature and useful platform over the coming years. The benefits that a user gets in using IM opposed to email is that presence means that I can limit the traffic I receive when mobile. Alec Saunders’ company Iotum has started to converge Blackberry with presence, with the application Talk-Now. This is the first step in turning presence into a platform.
Again there are several players in this segment that provide mobile access to your usual IM client (Yahoo, MSN, ICQ, AIM). I used to use MixIt, a South African based company, as they were one of the first companies to provide Jabber support and therefore access to GoogleTalk. EQO is another company that gets you mobile with IM although due to feedback from users they are now deprecating support for Skype so I will probably stop using them.
This leaves my current favourite as Agile. They now support more than the usual SIP based clients which means that do support GoogleTalk now. They have a wide range of phones that they support, a problem encountered by some as the various Symbian platforms change from phone to phone and vendor to vendor.
The GSM and CDMA technology is ideally placed to support location based services as the underlying system relies on location and tracking within and between cell sites. This means as cellular networks grow and coverage increases a virtual map is laid over the country. Each cell serves an area and within it you can record services available and where you are within that cell.
The promise of cell centric location based services has been tried before but the telecom companies tried to over-engineer it. There are some new applications that use a more simplified approach to location based services without relying on GPS.
One of the better ones is Mobio. From your cell phone handset you can get information on cheap gasoline, a panic kit (in case of emergency), shopping and cinemas near you.
Location based services will continue to grow and more uses will be found for them. They are not confined to cellular as WiFi enable laptops also use access points and this can also be used to determine your location.
A player in this space is Loki with their location based service for laptops and internet devices (such as Nokia’s 770 internet tablet). I have written about how this technology could evolve and believe that there are many innovative uses for such services. The opportunity to get these onto mobile handsets is boundless.
Finance transactions are starting to be performed on the mobile handset. The mobile phone as a wallet has been changing the lives of many in Kenya since going live earlier this year. The system, M-Pesa, allows for micro payments to be setup and received over a mobile phone, from bus journeys to bank transfers, the system is empowering many.
The ability to conduct money transfer using your cell phone will be the next leap in creating cashless societies. Hong Kong’s Octopus card and Singapore’s EZLink uses RFID cards and can be used for public transport. Soon there are plans for vending machines and a pre paid equivalent to EFTPOS. To be able to conduct these transactions on the one item most people typically always carry, their mobile phone, will move many countries to truly cashless economy.
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