By Cesar Calleja
PricewaterhouseCoopers
Partner & Head of Information Technology

Limiting oneself to reducing investment in technology does not guarantee that information technologies will continue adding value and ensure a company’s sustainability in the medium and long term.

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Title: SaaS: Un mercado en plena expansion [Saas: A Booming Market]
Source: IDC, commissioned by six firms.
Date: March 2009
Abstract: Those interested in the SaaS (software as a service) alternative now have a succinct but enlightening study by IDC, conducted at the request of industry providers A3 Software, CETEL, Microsoft, NTT Europe Online, Sage and Telefónica. One key piece of data from the publication is that just 6% of Spanish companies use SaaS. Why has it not taken off? Partly due to cultural reasons, such as the general unwillingness of business owners to let internal information leave the company and, above all, unfamiliarity with the offering. However, SaaS brings a number of benefits: it allows companies to free up resources and focus on their primary activity, simplifies application management, reduces the time needed for implementation, and brings increased productivity by providing access to a given application anywhere and anytime. The current economic crisis works to its advantage thanks to the lower initial costs involved, the pay-per-use model and the savings on employee training and maintenance. Nevertheless, these benefits are going unnoticed, as just 22% of companies are aware of this option for using applications and 12% of those have partial familiarity.

Another key piece of data is that of all the companies familiar with SaaS, 30% are already users of this model, something that IDC considers a testament to its major growth potential. Despite the two factors mentioned previously, the lack of trust and knowledge, IDC predicts that software as a service will gradually evolve and coexist with the traditional model based on the use of a local server, before finally gaining ground and becoming the standard. IDC estimates that in 2012 its penetration will reach 18% among Spanish companies, which would mean three times the usage in as many years.

Read more  (PDF, 179 Kb)  (spanish)

The industry is not about to sit back and accept Google’s runaway success in the realm of search engines, which Le Monde considers the "privileged gate of entry for Internet users to access knowledge online." After losing 3.5 billion dollars over the past three years and struggling to gain a meager 10.3% share, Microsoft is trying once again to make a name for itself in this market. The latest effort, known as Bing, is an overhauled version of its Live Search, which itself has replaced MSN. With the new project, the software giant is hoping to shore up some of Google’s weak points and plans to invest between 80 and 100 million dollars to promote it. Most observers feel there is value in its technical improvements but doubt they will be enough to challenge the mighty Google, who continues to rake in the revenues. “Worse,” says Business Week, “Google is using its dominance in search to attack Microsoft's most lucrative businesses—including its Windows operating system and Office suite of business software.” Meanwhile, according to Le Monde, "It will be quite difficult to destabilize the search engine of the Mountain View giant.” 

Another player, Wolfram Research, developer of the world-famous science program Mathematica, has thrown its hat in the ring for the first time. Its product is called Wolfram|Alpha, an English-language search engine whose design is a cross between Wikipedia and Google and which, according to Mercé Molist of El País, "hosts over 10 billion pieces of data that has been culled from public sources and verified by experts (...) and whose strength is scientific knowledge."

Google, however, is not resting on its laurels. In early May, the company officially launched “Búsqueda Wiki” (the Spanish version of SearchWiki), a still-meager system that allows registered users to vote on the search results being displayed. Clicking on the arrow for best result places that item at the top, and although the voting will not currently affect other users, they will be able to see the comments.

This was precisely the biggest value of the recently scrapped Wikia Search project. The social browser created by Jimmy Wales (co-creator of Wikipedia), launched in early 2008, “emphasized transparency and voluntary collaboration. The project—backed by Amazon and aimed at taking on search leader Google—was ultimately a dismal failure,” as reported in our April newsletter.

According to Nielsen, as of March of this year Google held 64.2% of the market share in the United States, while Yahoo! held 15.8% and Microsoft’s Live Search, 10.3%. They are trailed by an endless list of search rivals trying to survive by means of specialization. The articles published on Eroski’s Consumer and Pixeros.com highlight some of the notables in that category.

Articles in El Periódico (spanish), google.dirson.com (spanish), El País (spanish), Consumer Eroski (spanish), Pixeros.com (spanish), Business Week, and Le Monde (french)

When asked to predict major technology trends in 2009, most analysts agree that Cloud Computing is closely followed by the rise of social networking and Web 2.0 tools in the enterprise sphere as the most dominant themes.This feedback strongly supports IESE's belief that online collaboration is starting to play a key role in driving business model innovation and, with it, an organization's competitive advantage. To gain a better understanding of this trend, Prof. Sandra Sieber and Prof. Evgeny Káganer are spearheading a global research study that will explore how firms use social media tools to foster collaboration across organizational boundaries. To learn more about the study and to sign up for participation please visit the project’s website.”

Social Media Project Website