Welcome to 2012. Hope you had a great break and have arrived back recharged. 2012 is going to be a monster year for the tech industry here in New Zealand and worldwide. Global economic turmoil? What global economic turmoil?

For my first post of the year I thought I’d deviate marginally off-topic and tell you about my Christmas (=Summer! for those in the Northern Hemisphere, poor dears…) holidays here in New Zealand, which were my “best ever” – for the following reason: I brought work home with me (sort of) and used Agile planning techniques.

To explain:  being an more-than-average entrepreneurial type I always struggle when it comes to taking a holiday and I have to leave work behind for a while. During an average working week my mind is constantly pummelled with tons of emails, tweets, texts, facebook posts and conversations and I guess this non-stop over-stimulation is actually an addiction. Mainly though, it’s the feeling of purpose that comes with work: I’m always working *towards* some goal or other, and there’s always something next in the queue. When it comes to “holiday” time however I suddenly run off this cliff (like Wile E Coyote spinning his legs before a big fall) and suddenly have this big void of indecision: what should I do with all this time?

I know that I’m meant to “just relax” and “spend time with the kids”, not to mention catch up on jobs around the house, but what usually ends up happening is that as a family we end up with all this unstructured time, and no-one being able to co-ordinate who wants to do what with who when, and you end up having 9am breakfast arguments about what should we do today… Plus I personally end up feeling guilty about the waste of productive time… (don’t ask, I know, I’ve got issues ). Meanwhile by the end of the holiday you start looking forward to the structure and buzz of going back to work and at the same time stressing because all those jobs about the house never got done…

SO! This holiday I determined to do something different, and boy did it work. On the day before Christmas, (first day of the 2-week holiday) I called a “family summit” with Mrs Me and my 3 daughters, and visiting mother-in-law, and explained that we were going to run a holiday planning exercise. (Yay! everyone cried. I jest.) We then basically ran a variation on a full Scrum planning meeting, with everyone writing down all the things they wanted to do that during the holiday on postits (day trips, activities, beach trips, sports, “timeout”, parent/child one-to-ones and, yes, jobs around the house). (This is the “Holiday Backlog”) We then went through a facilitated “Holiday Sprint Planning” session where as many activities as possible were prioritised and placed on a chart with 14 days marked out “Morning / Afternoon / Night”. Everyone got to suggest their favourite items and the group would agree yes or no. (My favourite was one of my 6-year old’s postits: “swiming with dulfins” – we didn’t quite do that in the end but we had a wonderful sunny boat trip out around Akaroa harbour where we saw loads of Hectors’ dolphins swimming in and around the boat. She was very happy with that. Highly recommended trip if you haven’t done it.)

The end result of the planning session is shown above – this was our plan for the fortnight. Any activities which didn’t make it onto the plan were parked in the “Rainy day” column at the end.

I posted the photo to Facebook at the time and the immediate response was “Good luck with that ” (Thanks Conor).  Well I have to respond that we stuck to the plan amazingly: only a couple of items had fallen off by the end, and I reckon I personally achieved more than 100% more during the holiday than I would have otherwise. The best thing was that everyone felt happy that their ideas had been heard, and everyone got a fair share of the activities in the plan. PLUS we always knew what was up next: no prevaricating and “negotiating” every morning. AND because we had left  space in between to relax with a good book, it didn’t feel like a race.

As I said at the start, I have to say this was the best ever holiday because of the Plan – so, Agile planning works in all sorts of contexts! Try it. (We’re just about to convene the January/February/March planning meeting as I type.  ;-)  )

I’d just like to say thank you to all of Memia’s customers, partners and friends for your support during 2011 – we’re now well over the earthquakes here in Canterbury and I think we’re all now looking forward to what’s shaping up to be an exciting and prosperous 2012.

In particular, Memia is one of the first round of tenants in the EPIC Sanctuary building, due to be completed mid-year. After losing our lovely old offices in Cashel Mall due to the earthquake (see the transformation below), we’re looking forward to re-establishing ourselves in the CBD next year.

107 Cashel Mall - Old Weekly Press Building - Before the Earthquake

107 Cashel Mall - 22 Feb 2011

107 Cashel Mall - Now (photo courtesy Dean Norrie http://www.starphotographers.net)

Meanwhile, here are just a few of my picks for the best media of 2011. With an eye on the future, naturally. Enjoy.

Most thought-provoking film

“Transcendent Man” by Barry Ptolemy – Fascinating full-length documentary on Futurist Ray Kurzweil and his theory of technological acceleration leading to the Singularity.

Best non-fiction books

Steve Jobs’ death in October was the defining event in the technology industry in 2011. If you haven’t already read this rapidly-published biography, then it’s a recommended read, chronicling the earliest days of Apple and painting Jobs in a warts-and-all profile which is not always flattering.

James Gardner: The Intelligent Universe: AI, ET, and the Emerging Mind of the Cosmos: Although not written in the easiest style, Gardner introduces his theory of the “Selfish Biocosm” which says that intelligence is not some cosmic accident, but that intelligence and life are explicitly coded into the physical laws and constants of the universe. Furthermore, universes beget other universes in some kind of meta-Darwinian evolution. Mind expanding cosmology.

Best science-fiction books

Charles Stross – Rule 34 Probably my favourite sci-fi author currently writing, this book channels Ian Rankin’s Inspector Rebus forward to the near future with a police procedural set in 2020s Edinburgh. As with a lot of Stross’ work, he has vividly imagined a future influenced by today’s emerging technologies (3D printing, augmented reality, artificial intelligence…), and there are more new ideas in the first chapter than you usually find in any other book. Plus, written with a dark but very funny sense of humour throughout. Not to everyone’s taste, but highly recommended.

Peter F Hamilton – Void Trilogy – I spent quite a bit of time in 2011 reading through the 2000 pages or so of this trilogy, and found it difficult to put down once I was going. Set thousands of years in the future, Peter Hamilton weaves together multiple strands of plot centred around the “Void” in the centre of our galaxy which is gradually consuming the whole galaxy from within. Cleverly, he even manages to encapsulate a medievalist fantasy novella within the complex plotlines. Lots of suspension of disbelief required for “hard” sci-fi enthusiasts for the more “imaginative” physical possibilities (commuting on trains via wormhole…? Hmm) but good fun.

Most insane pastime

Finally, here is a video of an activity which I will NOT be trying out in a hurry. Absolutely. Insane.

Happy Christmas!

]]> http://memia.com/blog/general/2011/happy-holidays-memias-pick-of-2011/feed 0 http://memia.com/blog/general/2011/memia-google-apps-practice-moves-to-arise-business-solutions http://memia.com/blog/general/2011/memia-google-apps-practice-moves-to-arise-business-solutions#comments Mon, 14 Nov 2011 04:37:11 +0000 Ben Reid http://memia.com/?p=523

We’re excited to announce that Memia’s Google Apps practice is making the transition to a new company, Arise Business Solutions Ltd. Memia’s Google Apps practice, which has been built up since 2009 and serves customers throughout Canterbury and the South Island of New Zealand, will now be served by a dedicated team of certified Google Apps expert practitioners led by Arise Managing Director Rob Laidlaw. Ben Reid from Memia will continue to serve as a director on the Arise Board.

Memia’s existing Google Apps customers will experience a seamless transition to the new arrangements, but with enhanced levels of service and support. Arise provides specialist consulting, implementation, support and training services for a growing number of best-of-breed Cloud Business Solutions, including Google Apps, WorkflowMax and Zoho. Arise also helps businesses to migrate their IT off physical servers and into the cloud to provide more secure, more reliable and less expensive solutions.

Why “Arise”?
We chose the name “Arise” because we help our customers to move their IT UP into the cloud, free from the headaches of complex and costly on-premise IT. We also wanted to express our optimism that our home city of Christchurch will “Arise” from the 2010-2011 earthquakes, and we see smarter IT being a big part of the successful rebuilding of the city.

Meanwhile Memia will continue to focus on providing strategic technology and architecture consulting services to software companies, startups and IT organisations throughout New Zealand and beyond.

For more information, see the Arise Business Solutions website: http://arisesolutions.co.nz or contact Rob Laidlaw: rob.laidlaw@arisesolutions.co.nz.

While Google mentioned that it wanted Moto’s properties in phones, tablets and TV set top boxes, initial market analysis to the news indicate that it is the latest episode in Google’s patent battles being fought with Apple and others – it seems that Google is planning to wield Motorola’s patent portfolio as a defensive shield in IP litigation which Microsoft, Apple and Oracle have been taking against Android licensees – HTC, Motorola and Google itself – over allegations of IP violations.

Google added some canned quotes from their major licensees HTC, LG, Samsung, Sony Ericsson approving of the deal – Google is saying that Android will stay open and that it will not verticalize into an Apple “mini-me” any time soon. Asian Android device manufacturers share prices have risen on news of the deal.

The question now is what this means for the other major smartphone OS manufacturers: Apple (iOS),  HP (WebOS), Microsoft (Windows Phone) and RIM (Blackberry). (There’s also been mention of Samsung giving Bada another push, but I think that’s unlikely. Nokia killed off Symbian earlier this year in favour of Windows Phone.)

If Google really does intend to keep Android open, then it seems inevitable that 3rd party licensing for Smartphone OSes will become the de facto standard market mechanic, at least for everyone else except Apple. Expect HP to start licensing WebOS to other manufacturers (eg Samsung, LG) in a similar way that Microsoft have bought off Nokia. The question is whether they can continue to charge proprietary  licences when Android is Open Source.

RIM, meanwhile, is looking vulnerable to takeover very soon, especially with all those patents…

Take a look at the infographic below, and then I highly recommend you download the report. Anyone doing an internet startup needs to read this, whatever their stage or experience: the accumulated “secret sauce” of the Valley is starting to be codified. Jeez this world we’re in is accelerating…

Last week Microsoft released the first preview of the Windows 8 user experience last week: see 5-min video on YouTube at: http://www.youtube.com/watch?v=p92QfWOw88I

Summary: Major changes from  the Windows 7 UI, designed primarily for a touch-based UI but borrowing and extending the “tiles” metaphor from Windows Phone 7. The UI is mainly built in open-standard web technologies: HTML5 and Javascript – which has brought into question to future of proprietary Silverlight and .NET UI components (WPF).

(True to form, from the comment at the end MS still seem intent on swimming against the tide and talking about “Slates” rather than “Tablets” for touchscreen devices).

See also: http://www.pcworld.com/businesscenter/article/229519/microsoft_windows_8_demos_spur_developer_worry.html for commentary on how this has been received for the MS developer community.

The most valuable session from the conference for me was “SaaS Business Fundamentals” featuring the CFOs of three leading SaaS businesses: Marc Linden, CFO, Intacct, Tyler Sloat, CFO, Zuora and Mark Symonds, President and CEO, Plex Systems, and moderated by Robert Hull, CFO of Adaptive Planning.

(Slides and videos from the conference can be found at http://siia.net/aatc/2011/presentations.asp)

My (sketch!) notes from the session are below.

Key Metrics:

• ACV (Actual Cash Value)
• Run rate
• Churn by revenue
• Churn by customer numbers
• Pipeline size
• Gross margin (not ebitda)
• CAC (Customer Acquisition Cost)
• Customer lifecyle value over expected life (assume 7 years was the consensus)

Given all of the above, you can then calculate Payback Ratio – see commentary from Josh James, CEO of Omniture about the “magic number” . Fundamentally: if you can get payback period < 1 year => no limit on sales & marketing spend.

Generally keep prof services numbers separate from SaaS licence revenues.

Growth rates: does CAC change as business ramps? Keep an eye on this.

Get a handle on sales cycle:

• Total pipeline time
• Total close time
• Note that investment in marketing will often yield results next quarter or beyond

Sales Strategies / Channel:

Channel vs sales team vs direct? Obviously depends on the product, but still unclear – interesting session on the growing field of RPM (Revenue Performance Management) from companies like Eloqua and Marketo indicated.

• Align with channel – understand economics of the whole chain.
• Think about implementation support for partner.
• Who owns the customer?!
• Suitability of Channel depends on deal size and product complexity.

How to internationalize?

• Localize first, get reference accounts then scale.
• Localized support in same language /timezone
• Data sovereignty issues
• Speed / performance issues
• Big costs ahead of curve to invest in new geography
• Get strong local implementation partners.

Then some Q&A:

Q: When evaluating CLV do you measure full value (eg referrals?)

A: No

Q: How do you increase licence fees?

A: Managing increases in licence fees are important: eg add ons. Best strategy is to sell to installed base at special rate.

Q: What are the inputs to forecasting models?

• drivers to sales model
• cost model
• build up quota attainment
• forecast at point of measurement

Q: What proportion of ongoing spend goes to product development?

A: Varies by stage of lifecycle of the company. See Opexengine for reports. % of revenue is one that is used. Depends on what kind of product you’re selling.

(PS I had an awesome ride out with Air New Zealand (@flyairnz) on flight NZ2 to LAX in one of their brand new Boeing 777s – I got upgraded to Premium Economy and the cabin layout is superb. Also the in-flight service was fantastic: Air NZ really employ quality people eh? Coolest of all is the seamless touchscreen drinks ordering – I ordered a Glenfiddich with ice and it turned up 2 mins later…). The only downer was the Panasonic in-flight entertainment system needing to be rebooted during the flight. (Interesting to see it’s running on Linux and all the command lines roll through when it’s rebooted). Makes me think that the plane must be carrying its own mini-datacentre (+cooling?) to serve interactive video to >300 seats? )

Although the workshops were intended to be a broad introduction of the subject, I found many of the audience members already well-versed in the issues and significantly on their way towards implementing a SaaS strategy. Most participants were unfazed by the technical challenges of delivering  a multi-tenanted architecture and implementing subscription-based billing models. The areas which drove the most interest around the room were around the business models for SaaS – in particular emerging benchmarking data of the underlying financials.

Some of the key triangulation points which I’ve come across  include:

Operational costs need to come down to 20% of revenues – Bill McNee, Saugatuck Consulting (Dec 2009)

Typical COGS of a SaaS business is 30%-35%, implying typical Gross Margins of 65%-70%. Opsource and Montclair Advisors (March 2011)

Average time to break-even for a SaaS business is 5 years. Opsource and Montclair Advisors (March 2011)

Average Customer churn rate for SaaS companies is 13% (OpexEngine, March 2011)

Average length of time to pay off customer acquisition costs: 18 months (OpexEngine, March 2011)

Average spend on sales and marketing as a % of revenues: 50% (OpexEngine / Montclair Advisors, 2008)

The P/E ratio for SaaS businesses looking forward should be around 20 (Investopedia, Dec 2009)

Anyone got any more?