When we first started to develop our own apps, we took a step back to see what we thought would be both scalable and attractive to customers.  Part of what we saw was the begining of a trend towards web-based apps instead of traditional client-server apps.  Clearly, the ability to deliver solutions as web apps would need to be an important part of our solution offering. 

As part of that planning, we began using a loosely coupled integration method, where we isolated the interfaces between our software and the ERP system, so that we would have a way to rapidly upgrade our apps when the ERP was upgraded.  In practice today, moving from one version of Tensoft FSM from the next typically takes only a day to validate that its still working, using the integration tools available to us from the ERP system that we’re integrating to.  Our applications didn’t become so tightly coupled with one ERP that it required a lot of work on our side to migrate to the next version.  We also benefited from this loosely coupled integration model later when we moved our apps to a cloud environment, because we have an interface that’s a web service exchange between ERP data and Tensoft app data.  This is a bi-directional data model that allows us to de-couple our software in a true cloud-based environment so that, for example, we can host our software for a customer and they can have their ERP system on-site on their servers, or we can host both our software and the ERP, or they can have both on-site.  Whether it’s a private cloud or a public cloud, the design should still apply. 

The challenge with a cloud-deployment model for traditional client/server software is that the underlying infrastructure needs are greater since you need to provide more of a remote desktop or terminal server-type platform in order to deploy the software.  It increases the complexity and resources required to deploy that type of solution.  The underlying infrastructure needed to deploy a client/server app in the cloud is greater than for an application that’s been developed for the cloud that can run in a web app and has more universal access for remote users.

In terms of licensing, our model provides some advantages as well.  Tensoft is able to provide vertical appication-specific functionality directly to users who may not need access to the ERP system itself.  Therefore, they don’t have to buy GP seats to access Tensoft apps.   For example, with Tensoft RCM, if a user wants to look at the revenue sub-ledger, they can just use Tensoft RCM independently of the ERP system.  It can be a more cost-effective licensing model for many companies.

 In a world where "the new new thing" is king and longevity is often slightly suspect, it's startling to think that we've now been building web applications since before the turn of the century.  Our current applications and business have evolved to the point where there's scant (if any) mention of those early efforts on our current website, but thank goodness for the Internet Archive: The Wayback Machine!  A quick glance back to this page from April 2000 shows some of the projects that we'd taken live for customers by then, including a web-based travel and expense system. 

When we began developing our current product offerings shortly after that, there was no question about it: they'd be web applications.  Even if most of our customers weren't ready to put their entire financial and/or manufacturing system(s) in a virtualized environment, it seemed to us that the writing was on the wall.  We wanted to develop for the new century.

The move to the cloud has changed our approach in many ways, but it's important to remember some of the very basic differences between today and yesterday.  For starters, the shift from client/server access to a web app model means that only what's required goes to the client.  In other words, the client's machine is no longer required for computing power.   Even more importantly, the shift to using the browser as a web interface has re-set users’ expectations of what they can expect from web applications and what the experience of using a web applications should  be like.  In some ways, the key question that we asked ourselves was: “How do we create more of a web/consumer product experience in our  business management applications?”   For example, we work at making everything no more than 3 clicks away, and we make sure that the basics are there, like a back button that takes you back. 

Building web applications today is all about building applications the way that they need to be built to optimize the world of on-demand cloud systems .   A little experience doing this definitely doesn't hurt!

   While there’s been plenty of hype regarding the benefits of Cloud Computing and SaaS, a commentary by Proformative’s John Kogan in Forbes – “Defining IT Differently” – provides a very reasonable argument.   Kogan argues that moving to the Cloud and/or SaaS solutions reduces the number of IT staff needed at companies who do this, but that those who are left are more strategic.

I agree that this shift changes the composition of your IT team.  How it changes the composition depends on where you are in your company history.  Smaller companies who move to the Cloud will no longer need as many system administration staffers, such as desktop support and support for your engineering team.  Subsequently, the shift to the Cloud allows smaller companies to bring in a business analyst(s) at a much earlier point than they normally could afford to – definitely a strategic IT position for most companies.  While it still desirable to have someone on staff who understands what your Cloud provider is doing, and there may be some tasks you need/want to do on your own, the move generally means a reduction to system administrators and hardware specialists.

Kogan touches on another point that I see as one of the most significant benefits of the Cloud - the ability for companies to have access to far more – and better – hardware, technology and support in the Cloud than they could economically source for themselves.  This democratization allows smaller companies a more level playing field, and it also makes the Cloud a comparative money saver if you consider all of the costs that go into it (labor, hardware, replacements, training, etc).  This comparative cost savings is a point that is often over-sold and misunderstood – it’s a powerful benefit, but “the Cloud is cheaper” is not an accurate picture.

  Since Tensoft President and CEO Bob Scarborough isn’t always great at blowing his own horn, I’ll do it for him. I’m proud to announce that this April Bob started fielding questions as an industry and subject matter expert on the Proformative website (www.proformative.com).

Proformative is an online resource and professional community that provides a new and effective way for corporate finance, accounting, treasury and finance-related professionals to find answers to their technical and operational questions, and easily find practical resources that serve their daily needs. On the site, financial professionals can search an ever growing knowledge-base of peer, expert and aggregated content to quickly find practical answers and relevant information.

Bob’s expert page can be found at http://www.proformative.com/ask/expert/bob-scarborough. He is listed as an expert in: 1) revenue recognition accounting; 2) manufacturing accounting; 3) cloud computing and SaaS software; 4) revenue recognition software and 5) Microsoft Dynamics GP implementation. Bob encourages questions and discussions on real-world financial issues, and enjoys the interchange of ideas and solutions that the site facilitates.

If you lose the link above, simply click on “Ask the Experts” and type in “Scarborough” to see the questions and comments that are currently under discussion. Or, send Bob a question and engage in open or private discussions (anonymously or with your real name) and get his perspective on issues on which you deal every day.

We’ve recently posted a great new customer case study to the Tensoft website that beautifully illustrates the benefits of cloud deployment. Focusing on our customer, Syndiant, the four-page case study describes how this technology industry start-up has been able to leverage Tensoft’s industry-specific solutions in the cloud to quickly gain better visibility, control, and efficiency.  .

 Syndiant’s V.P. of Operations, Tupper Patnode, provided much of the commentary in the document, discussing in detail how Tensoft FSM and Microsoft Dynamics GP, running on a cloud platform provided by Tensoft partner SaaSplaza, enabled the company to comfortably plan and scale their growth from a $1 million company to $20 and up to a $60 million enterprise. Take a look at the Syndiant case study and tell us what you think by responding to this blog.

And, if you’re planning to attend Microsoft Dynamics Convergence in Atlanta on April 10-13, discuss the particulars of the Syndiant project or your own future project with our own Michael Chadwick and Sonam Thandi in the SaaSplaza booth #1316. They will only be at the booth part of the time, so contact me ASAP if you’d like to arrange a time to meet.

See you in the Cloud!

It seems that even SaaS skeptics are now finding it hard to deny that cloud deployment is a trend.  A February 21, 2011 article published on MSDynamicsWorld.com cites a recent study that found an overall increase in SaaS adoption from 6% in 2009 to 17% in 2010.   Results like that are tough to attribute to just “marketing hype.”

With Tensoft’s focus on the technology industry – and with that industry’s natural tendency to constantly create new companies – perhaps we’ve seen more than the national average’s share of SaaS converts.  We certainly began to see strong interest in the SaaS model from our customers and prospective customers earlier than our colleagues’ who specialize in other industry segments (or those who have no particular industry focus). 

In fact, demand was strong enough that we announced the release of our end-to-end cloud ERP solution for the fabless semiconductor industry in 2007.  By the third quarter of 2009, the majority of our new customers were choosing to deploy in the cloud.   

One of Tensoft’s customers was interviewed for the article, so I thought the excerpt below might be of interest to Technology Insider readers:

Most of the companies that decide on a SaaS model don't have an ERP system in place.... That was exactly the case for Syndiant, a manufacturer of small and high-resolution light modulating chips used in ultra-portable projectors.

"We're an early-stage company that started in 2004 and we didn't do product manufacturing until late October 2009," said Syndiant Controller Cory Johnson. "In December 2009 the executives of the corporation made a decision that it would be wise to go from QuickBooks to an ERP system. And they decided since we didn't have an onsite IT staff it would be better and more cost efficient to run it as a SaaS hosted model."

After looking at a number of vendors, the company chose Tensoft Inc.'s Fabless Semiconductor Management solution (FSM) and Microsoft Dynamics GP using Tensoft's hosted subscription model.

"It went live April 15 2010 and, for the most part, it went pretty smooth," he said. "The full ERP system was to help us manage from cradle to grave from procurement of raw materials to the maintaining and monitoring of our manufacturing that was outsourced to a third party. We had to have vendor integration so they could send us inventory status reports that we can automatically import and it will update and move our inventory from one manufacturing step to another and update the general ledger and accounting system on a more timely basis so we can be more efficient."

For Syndiant, the executive team didn't really have any concerns when they were considering a SaaS ERP implementation, Johnson said.

"Considering the people who made the decision weren't accountants there weren't any concerns," he said. "But one caution should be around security measures. But the security measures set up by Tensoft and the way they it set up for us to access the hosted solution is pretty safe and secure. It's working well and when we run across an issue we e-mail Tensoft and we usually hear back within an hour or so."

Please note the system live date of April 15, 2010 above.  Then take a look at the January 18, 2010 press release when Tensoft announced that Syndiant had just signed.  That’s a three month implementation for what the customer has described as “cradle to grave” ERP, with no onsite IT staff - a ringing endorsement both for everyone involved, including Syndiant’s hard-working team, and for the SaaS deployment model.   

By the way, if you’re interested in more details about Tensoft’s cloud deployment at Syndiant, please stay tuned for the case study that will be available soon.

I'm here in Atlanta, GA for Microsoft Convergence, the 14th annual user conference for Microsoft Dynamics business applications, along with over 8,000 attendees.

Yesterday, Microsoft announced the general availability of the Dynamics GP 2010 (version 11.0) ERP software solution.  The opening keynote address was delivered by Stephen Elop, President of the Microsoft Business Division. The spotlight was the agile interconnectivity of Microsoft Dynamics GP 2010 simultaneously working with both on-premise and on-demand systems including Customer Relationship Management SaaS software, instant messaging, video conferencing, word processing, spreadsheet and email programs. Some of this was pretty interesting, so you may want to take a look at this live demo: http://www.microsoft.com/presspass/presskits/dynamics/videogallery.aspx. 

Dynamics GP 2010 enhancements include:

• Tighter integration with other Microsoft business solutions and cloud computing technologies
• 100+ new dashboard indicators / KPI's
• 400 Excel and SQL Reporting Services (SRS) web based reports
• Simplified and enhanced workflow automation
• Web based ERP enhancements

Interesting Microsoft facts shared during the keynote on their cloud strategy including the Windows Azure platform:

• 20 million customers now using Microsoft cloud computing applications
• 70% of programmers focused on developing applications for the cloud
• Spending $9.5 billion on R&D in 2010

Simply put, it appears that Microsoft is "all in" as it relates to cloud and software-as-a-service technology.

- Mike Chadwick, Director of Sales, Tensoft