Addressing the conundrum of Cloud pricing is a challenge that can occupy ISVs transitioning to the Cloud for quite some time, at least in the first few years. And many more mature Cloud ISVs, though they have settled into a Cloud pricing strategy, still may not fully understand the range of options open to them, nor how they might rethink their Cloud pricing.

Little has changed since we first addressed the issue of the value metric in 2007 (344STR, SaaS Pricing: The Value Metric Is Only the Tip of the Iceberg, 3May2007).

On February 21^st, several Saugatuck analysts attended an audio conference focused on the IBM MobileFirst announcement, during which IBM provided an update on their newly announced offerings, their views of the mobility market, and their market strategy.

IBM’s target for MobileFirst is, as the name implies, the rapidly growing mobility market which by some estimates already includes over one billion smartphones and 400 million tablets. But, the real importance of MobileFirst is not simply a large number of new products and services. While the new offerings are significant in both their depth and breadth (details can be found on IBM’s MobileFirst website), Saugatuck believes the true importance and the underlying challenge of MobileFirst lie elsewhere.

In any uncertain environment, stability and a solid sense of direction are qualities to be sought and prized. In today’s still-emergent, ever-changing, hybridized Cloud+on-premises IT and business environment, such qualities should be among the top qualities in solutions and providers sought by IT buyers.

Unfortunately for the providers that tend to deliver these, their slow and steady progress, including incremental increases in solution capability and value, tend to be quietly ignored in favor of splashy, hyped, and sometimes theoretical offerings. There’s just not much that sexy about a long-term strategy and quietly-capable leadership.  But those qualities tend to reward not only the provider, but its partners and customers, enabling a solid and secure foundation, upon which to build and manage business in a constant series of crosswinds and earthquakes.  

What is Happening?  A recent article in The New Yorker by Columbia University professor Tim Wu, author of The Master Switch, once again raises the question of whether technology providers perform better when they are “open” or “closed.” In his New Yorker article, Wu makes the claim that a tech provider generally does better when it is open, unless it is run by a genius (e.g., Steve Jobs) who can make faster, more proactive decisions that enable the company to move more nimbly and make fewer market mistakes.

While we agree that companies have historically exhibited the characteristics and capabilities Wu describes, overall we believe that a confluence of market shifts, changes in buying patterns, and the emergence of a new master Business and IT architecture - driven by Cloud, Mobile, Social, and Analytics (CMSA), stitched together with Integration - presents a means of bypassing this debate of open vs. closed in a very real way – in short, Saugatuck’s Boundary-free Enterprise™ (BfE) model.

In a significant re-ordering of its business org and product portfolio, global SMB software Master Brand The Sage Group is selling off seven product lines that it considers non-core.

In a multi-faceted deal including cash, private equity, seller financing, and shifting ownership stakes, Sage North America is selling contact management software products Sage ACT! and Sage SalesLogix to Swiftpage, a US-based digital marketing platform provider for SMBs. Swiftpage has received capital from Sage and from private equity investment firm Accel-KKR to finance the acquisition and fund future growth. Sage will also end up with a 16% ownership stake in Swiftpage. Accel-KKR itself will purchase Sage Nonprofit Solutions outright. And Sage has received a binding offer from private equity group Argos Soditic for the acquisition of C&I, ATL, and Automotive in France, and Aytos in Spain.