Software Vendor – are you moving your SharePoint Solutions to the App World?

sharepoint content typesSharePoint and its market penetration in enterprises can’t be denied. It is used by a massive amount of organizations and there are hundreds of thousands of developers building solutions using SharePoint as foundation for developing solutions. According to AIIM, one in two corporations are using SharePoint.

SharePoint is a popular platform for system integrators (SI) as well as independent software vendors (ISV). The former category typically sells custom application development services based on time and material or fixed cost projects. These solutions are typically “one-offs” even if the SI accumulates software assets in their internal code repositories. Effective SIs try to reuse these assets as much as they can, but that is unfortunately not a common practice among many organizations.

ISVs want to create productized solutions where the software assets can be reused in many organizations. However, creating real packaged solutions that can be deployed “as is” requires different skills than implementing customized solutions for different companies. I have seen quite a few system integrators struggling with productizing their offerings even if there is a real pressure for SIs to sell solutions due to price pressure on projects based on time and material. Creating solutions with real intellectual property (IP) provides a springboard to better profitability as well as higher hourly prices if the business model is built in the right way.

I have been part of organizations using SharePoint 2007 and 2010 in solution development but the architectural model and delivery methods have not been very flexible specifically for ISVs. For an SI that wants to sell time and material, the platform is perfect as some things are labor intensive and just need time to get done. Both of these releases of SharePoint (2007 and 2010) are built on “full trust” model while the new SharePoint 2013 is based on a new “app model” that Microsoft introduced in this new SharePoint 2013 release. What makes this model exciting is that it opens up the world for ISVs to reuse existing codebase as the foundation of the architecture is not to build intelligence in the SharePoint Server, but outside SharePoint. Besides this, Windows Azure is a perfect companion that can be used to house some of the solution. I am convinced that there will be quite a few solutions that combine technology from both SharePoint as well as Windows Azure.

SharePoint in some scenarios becomes the user interface (UI) to information and the logic resides outside SharePoint. An example would be a calculation engine that resides outside SharePoint and provides an API (Application Programming Interface) for other applications to consume. Microsoft guidance for SharePoint developers is to develop an App for SharePoint rather than classic solution whenever that is possible. There are of course many scenarios where this is not possible.

Most of the current SharePoint 2010 solutions have been implemented by using the “full trust solution” approach and these solutions can’t run for example in current Office 365 environment (with SharePoint 2013 Online). Microsoft enabled a new model in SharePoint 2010 (Sandbox) where some of the code would live in a “Sandbox” environment. However, the current recommendation is not to use the “Sandbox” approach due to different restrictions.

When I read about this new SharePoint 2013 app model first time, I thought about ISVs that have existing code assets that can be reused in different scenarios. I also got excited about this model as it provides a better experience for end users and IT to provide upgrades of the app in the same way as you would upgrade any tablet app. The application logic and the heavy-duty lifting can in many cases live in Windows Azure or even existing private hosting environments where the ISV just services new types of user experience to end users in a form of an app.

There is going to be lots of users in on premise SharePoint environments for quite a while, but starting to learn and review the possibilities in SharePoint 2013 environment should be a top priority for any ISV and SI that want to stay on top of the game.

 

What is all this talk about enterprise app stores about?

Iced tea at Georgia's, version 2We are moving into app economy and that is happening very fast. There are many predictions on the marketplace on this trend with Gartner forecasting that 25% of enterprises will have their own enterprise apps stores for managing corporate-sanctioned apps on PCs and mobile devices – all this within 4 years. Others are saying that this is already happening and it won’t take four years. Whatever the case is, ISVs needs to pay attention to this as CIOs in large organizations need to take control of the situation with deployed apps both in tablets as well as smart phones.

I think there is a big misconception in the word “app” when thinking about business models. Many relate an “app” to small apps used by smartphones with either free or almost free business model. These are mostly consumer-focused apps, but the trend is that consumers will be using their smartphones to conduct business using apps, but these apps will be connected to backend cloud solutions that bring the scalability and logic to the game. Look at an app as just the UI to full-blown solutions where end users can run their business with small devices or tablets and use the cloud infrastructure as foundation.

The forecast for App Economy is huge and according to APPNATION, App Economy is going to reach $151B by 2017. What it really means for ISVs and any software developers organization is that they need to really get a better understanding how app economy is going to impact them going forward. CIOs will be asking questions how an ISV will support enterprise app stores and how the ISVs will support these app stores with their solutions. I am a bit amazed how little there is discussion off apps in our workshops but I think this is going to change going forward. Based on the study by APPNATION, the majority of mobile device owners under 45 years are using video apps and this supports my previous blog entry of eLearning.

There will be a need for both consumer-oriented and enterprise-oriented apps stores and it will be a space that will bring new opportunities for many players. The competition in this space will be based on innovation of solutions that people want to use and the use is measured on how much content the apps consume from the cloud. It is not rocket science, but it is a new world that people need to get used to.

In the end of the day, apps will have to be monetized in one way or the other and that is where the subscription economy comes to play and organizations need to understand how to price their solutions and all this based on value pricing.

App Ecosystem and APIs

Design by connectionI am a big proponent of APIs (application programming interfaces). Many of you might think that I must have a sick sense of humor, but I am seriously excited about this topic. We have finally moved to a new era where software development is moving away from trying to build colossal solutions that take years to implement and are hard to use. I gave an example of this in one of my previous blog posts how PowerObjects have been able to solve a business problem for me.

I am a true believer in assembling solutions of top-of-the-breed solutions and not trying to reinvent the wheel. If you felt a pinch in your heart, you should think about this and how you develop your software within your organization. Are you building things that already exist or are you building things that provide value-add to the overall solution based on your own core competence? I have led development teams an built more than 30 international software products with my teams, so I know what it means.

Application programming interfaces (APIs) can change your business and is a way for you to transform your business. It enables smart developers to create functional entities (consumable services) that can become a part of a larger entity. You do not have to go far to understand that quite a few companies have taken this approach such as Facebook etc. What is interesting is that APIs do not have to be only tied to external connections (messaging across organizations), but some large organizations are executing on effective API strategy within the company firewall. I truly think that the massive “one-fits-all” era is gone and the new era will be more about how you become part of your own ecosystem.

What we are seeing when working with large ISVs is the trend to not try to replace the old legacy solution, but to simulate a start-up by creating a MVP (Minimal Viable Product) that can meet the requirements of “good enough” for the end users. I think we have really come to the end of an era where more functionality is better, people do not have time to learn and re-learn things that should be self-explanatory. I am very excited about this MVP approach and will be writing more about this in my upcoming posts. I think this gives a new opportunity for legacy vendors to be competing towards new market entrants than every before.

I am excited about the potential with software, software apps and the cloud. I have been in the business for more than 20 years (hard to admit) and I feel like a young boy with the opportunities at hand. I like to challenge my brain (and keep myself relevant) by developing solutions and last weekend I spent customizing our internal Dynamics CRM 2011 Online instance to include the ability to collect information of TELLUS Academy students and also how to integrate all of this with our SharePoint 2013 Online instance. All of these are of course cloud-enabled and can be used from anywhere, anytime and independent of device. I set the objective in 2005 when I founded TELLUS to NOT have any servers that everything had to be surfaced from the cloud. Think back to 2005 and you will realize that there were not that many native cloud applications at the time.

If you are in the software business, you should look at the opportunities around apps and how you can build something exciting using the cloud. Unfortunately many organizations tend to think that creating an app has only to do with smart phones, but there is much more into apps than that. The app is just the “window to a service” that lives in the cloud and the user gets the benefit of this from many perspective such as scalability. I has been fun to see many organizations going into this direction with Windows Azure as backbone for the cloud services and Windows apps as the foundation. Windows Azure supports other mobile technologies such as Android and iOS as well.

 

Will your app developer be able to support your app use?

Light BikesI believe in the new app ecosystem. I can see the change happening in front of my eyes and I can see this in many ways. I can buy and install value-added apps for our Microsoft Dynamics CRM 2011 Online solution without having to call anybody and most of these solutions can be tried out for a period of time. I can also buy apps to my Windows Surface Pro and RT and some of the same apps can be purchased to my Nokia Lumia 1020 Windows 8 Phone.

The app economy is here and we can’t stop that. I also have a tremendous opportunity to see what is happening on the marketplace as I have to talked and worked with many ISVs about their cloud and app plans. It is fascinating to see how the change is impacting every single company and person that has to deal with software. If you are in denial mode, you will be left behind and many have already lost market share to smaller and nimbler vendors due to ignorance and in some cases arrogance.

I put a question in my title whether you feel that the app developer is going to be able to support your app use. I have already acquired quite a few Dynamics CRM 2011 solutions into our Dynamics CRM instance and each one of these solutions are critical in our daily use. To give an idea what type of solutions one can use is PowerAutoNumber from PowerObjects, an amazing company in the US that was selected as 2013 Microsoft Partner of the Year Winner in the Customer Relationship Management category. PowerObjects have identified a nice niche in their business by adding value to a software platform that is used by many system integrators and software vendors as a platform for derivative software product line development.

This PowerObjects solution module does one thing very effectively: it enables me to generate numbers to CRM entities with a 1-to-many relationships. I recently had a need to start tracking all of TELLUS Academy course participants and decided to build a small app in Dynamics CRM 2011 (like XRM) using custom entities but I did not realize that auto numbering was not part of the “base Dynamics CRM 2011 pack” so I had two options: to build one using JScript, use a bunch of “open source” code from the Internet or buy/pay for a solution to an ISV that will maintain and amend the solution. I decided to stick to the last option.

In my case, it is like having a bunch of Lego blocks that are assembled together and each building block brings value to the overall solution. I am sure that this is nothing new to the ones that still remember the discussion of component-based development in 90s. What has made this a reality in my mind is the acceptance of SOA-based solutions and some ISVs have really understood the importance of building effective APIs for others to consume.

What I like in the case of PowerObjects is their innovation of solutions that any Dynamics CRM 2011 user really needs on a daily basis. I will explain more about these and other topics in our solution portfolio in my later posts.

My message to any organization is that it should select very carefully the solutions/components that it is going to rely on in its operations. This is of course nothing new, but the new app/solution ecosystem is assumed to make everything so easy and we tend to forget that many easy things might break and the ISV even go out of business. What are we going to do then? Do check the background of the company that you are going to bet your business on, that is just a logical thing to do even if the buying and installing is easy in the new app economy.

The App Economy – How should we view app monetization?

The blogosphere is all about apps and how different ecosystems compete for the eyeballs of these and the money of course. You might still remember the the news when a far app pulled as much as $10,000/day in revenue but since then there is tens of similar applications on the marketplace. This started a trend where people left their well-paid jobs to chase their dream of creating apps and living a life without pressures. The growth of app economy is one of the most promising trends, but people/organizations that want to make real money of it, need to include some risk management into it as well. The app industry has become similar to film industry where relatively few people make money and the ones that make, are hugely successful like Angry Birds phenomenon from Finland.

One might of course ask oneself is whether this is a shift in our society and how work is performed. according to Erik Brynjolfsson (director of the M.I.T. Center of digital business), “technology is always destroying jobs and always creating jobs, but in recent years the destruction has been happening faster than the creation”. There is no question that technology is creating new jobs and apps can be part of this opportunity as can be seen in many of the reports that have studied this trend towards “app economy”.

What I have not seen many discussions around is how the app economy is linked with the enterprise software business. I have researched around this and identified the “dimensions” that are typically linked to the app business, but not that much is said how established software vendors should view this space and how these vendors can make a entry to the app space in a way that makes sense and where there is also a sustainable economical model.

So, the question that we should ask ourselves is how much of the app business is truly geared towards the consumer business and how much of this will gradually move into enterprise business? Should software vendors keep the app business in their plans when building enterprise solutions specifically using the cloud? If they should keep this in mind, what kind of pricing should the ISV use? Maybe free as the real money comes from the enterprise solution and not the app that accesses it? As you can see, it is not that clear and my own experience when working with both small and large enterprises, the app business hardly ever comes up in discussions. I am convinced that this will change and it will change very quickly. One of the drivers will be Windows 8 and Windows Phone 8 developers that will create solutions that will be based on app technology and not on traditional desktop app architectural model even if these will be able to run in Windows 8 Pro environment.

Another valid question that we need to ask ourselves is whether app economy should be see purely from mobile app development perspective or should we view it from a perspective where the device is just the means to get to what you want and the backend (typically the cloud) is the one that provides the services and brokers the interaction between different services. Shouldn’t we in fact be talking about services economy instead where organizations build apps to consume and combine information from different sources using different SOA interfaces that organizations/developers have exposed to the world. Isn’t this what we have always dreamt about?

NokiaExpressI downloaded today a Windows Phone 8 app (Nokia Xpress) to my shiny Nokia Lumia 920 and this app really demonstrates where things are going. After having installed the app, it asked me whether it can use location information (which most apps want to use), but what really made me to think about the future of apps is that developers really have to think “outside the box” on when developing apps. The thing with this Nokia Xpress app is that it enables users to store and read articles on your phone (locally) so when you travel, you do not have to use expensive data roaming. I know.. there are many of these apps from before, but what this app has specifically thought of is to really monitory and minimize data usage and provide a combination of technology such as Microsoft SkyDrive technology to store videos and images without having to use the data plan. Why is this relevant to me? Just this week, my son’s data plan was going over the limit and I found out that it was all about video streaming and 2 gig data plan does not cope well with this.

The topic of “app economy” is very interesting to me as researcher, but also as practitioner. A recent paper written by Dr. Michael Mandel and Judith Scherer (commission by CTIA (The Wireless Association) and Application Developers Alliance provides an interesting view on the app economy. According to Mandel, the entire “App Economy” was coming to use in early 2009 and was popularized by a cover story run by BusinessWeek in November 2009.

The way that Dr. Michael Mandel describes App Economy in his February 2012 report resonates well with what I have educated my customers in respect to ecosystems:

“ App Economy is a collection of interlocking innovative ecosystems”. Each ecosystem consists of a core company, which creates and maintains a platform and an app marketplace, plus a small and large companies that produce apps and/or mobile devices  for that platform. Businesses can belong to multiple ecosystems and usually do”.

There is no question in my mind that this topic is relevant to anybody that works in the software industry and it is fascinating to see how this evolves with time and what kind of new companies will rise to take advantage of this.

If you work in the Microsoft ecosystem, I highly encourage you to read the article “Microsoft’s cloud vision: Why Azure is the linchpin of the firm’s new devices and services strategy”. Another great article from Information-Management.com that predicts Enterprise Apps to go mobile big time and that money apps will move to the cloud. The article lists quite a few things that are very interesting and I encourage you to read that article as well.

Stay tuned for more, there will be more to come on my research on different topics and this app economy being one of them!