eWeek today is reporting on a new Forrester study “The State of Enterprise Software Adoption.” The line that caught my eye is “SaaS spending will continue to increase among enterprises. Although medium and small companies (defined as those with 100 to 499 employees) lead as the current users of SaaS, 45 percent of Global 2000 and 32 percent of very large enterprises remain “somewhat interested” in adopting SaaS in 2007.”

This is very consistent with what we are seeing. Our SaaS business is flourishing among larger companies. They choose to outsource the operations for a variety of reasons, but the bottom line is they choose to do other things with their own resources, and allow us to run their systems.  Some very large companies, who obviously have the wherewithal to run their own commerce or customer care systems if they so choose, choose instead to buy the service from us: Symantec, Coca-Cola, Airbus, T-Mobile, AARP, New York & Company, Road Runner Sports, Orange (of France Telecom) and Cingular, to name a few.

I expect this trend to accelerate.

[tags]SaaS, Software as a Service, Forrester[/tags]

From E-Commerce Times today:

Major e-commerce sites such as Costco.com, WalMart.com and Amazon.com all saw slowdowns in Web site operation or outright crashes.

The Overstock.com  Web site was briefly out when it was slammed with visitors seeking its special offer on the “Pirates of the Caribbean: Dead Man’s Chest” movie. The Wal-Mart site was reportedly down for as long as two hours after advertising online-only specials on Black Friday.

While the frustration may seem fleeting, the damage can be lasting.

“Online shoppers have exceedingly high expectations this holiday season, and they are an unforgiving crowd,” said William Agush, vice president of marketing at Web site performance monitoring firm Gomez. “It appears that ensuring a quality online experience trumps brand loyalty, and even savings.”

It’s likely that e-commerce companies will be in line to do some shopping of their own in early 2007, buying servers to beef up their Web-based infrastructure. In other words, to grow, and grow up, just a bit more.

One of our newer high-profile customers saw their volume double from holiday 2004 to holiday 2005 when they ran our software for the first time. When I asked the head of their eCommerce business what the best thing about his new site was, he said “It didn’t break.”

In many cases, online volume is increasing tremendously. Comscore is reporting a 25% increase this year over last across the industry. Even some great sites that have weathered the growth well in the past are reaching the limits of their aging technology. We are seeing an increasing number of these merchants realizing that if the site won’t stay up, nothing else matters – and that is driving two things: a strong resurgence in re-platforming, and the realization that build-it-yourself is no longer a viable strategy.  Modern sites demand the technology and experience baked into widely-deployed commercial platforms.

SearchCRM.com today has several industry analysts making predictions for 2007. In the piece, John Ragsdale, formerly of Forrester, now of the SSPA, says “ATG’s acquisition of click-to-call specialist eStara … provide online self-service with a new channel. This seamless transition from unassisted to assisted service provides an incredible customer experience. SSPA expects both business-to-business (B2B) and business-to-consumer (B2C) companies to begin adopting this technology in 2007 for high-value customers, both pre- and post-sale.”

Two points are noteworthy: First, he is right about the growth. We definitely see very rapid growth in this area. Second, the note about “both pre- and post-sale” is perhaps understated. We find that our customers are generally much more interested in the upside potential of higher revenue volume through higher conversion rates than in the cost savings on call time. Call times are reduced when the context the customer is experiencing is given to the agent – what page or product they’re looking at, their prior purchase or service history, etc. Conversion rates are increased (sometimes as much as 50% or more) when the site notices the shopper’s confusion or indecision (hovering on the checkout page, for example) or when high ticket items are researched or placed in the cart. Providing a little live personal attention at just the right time proves to have a huge payoff.