If I were in the market for investing into new cloud business software propositions (which I stress I'm not!), here are ten things that I would be looking for over and above the quality of the product (which ERP vendors over the years have proven isn't that important anyway…)
1) Horizontal not vertical
Developing a services for a specific industry sector is great, but your market is necessarily limited. Far better to deliver for a horizontal function that is found commonly across many sectors.
Horizontal functions are also less likely to be things from which any particular business gains competitive advantage. No competitive advantage means companies are looking for cost-effective best practice, and hence will be more amenable to moving to the Cloud.
2) Market to anyone but the IT department
Most people find most IT departments at best a bottleneck and at worst obstructive. Marketing the service directly to the lines of business you are trying to deliver to, and emphasising the lack of IT involvement required is the way SalesForce.com became as successful as they have been.
IT on the other hand are likely to see cloud services (rightly) as a competitive threat, and are more than likely to be resistant.
3) Make migration in easy, and migration out even easier
It's one thing to provide easy routes into a product. But even more important is to give a clear exit strategy to potential clients. Nothing is as persuasive as an easy path out should a client wish to change their mind.
4) Do everything over http
I'm amazed that some software companies still think it's appropriate to ask for holes to be punched in firewalls. Anything along these lines will end up raising the ire of both IT and information security teams.
If it can't be delivered via a browser, just over http or https, then it won't get easy adoption.
5) Avoid personal data
Another area to be wary of is anything to do with data relating to individuals. Although SalesForce are the exception to prove the rule here, data about people is the most regulated, and also the area where the current legislation in most territories is most out of step with the realities of the modern internet world.
6) Make it ubiquitously mobile
Anyone in Silicon Valley that knows their onions at the moment will tell you that the future is on mobile devices. But deliver to them all, rather than just one of the half dozen platforms. That probably means just a cut down browser version at first.
7) A mix of clients
If the service is already being delivered to a broad spectrum of clients, in terms of both size and sector then it's probably a good bet.
8) A disruptive model to generate revenue
If the service is looking to usurp existing traditional software vendors, then the new product needs to shake the market up in terms of how it charges. However the freemium or value-added services approaches are probably just jam tomorrow.
9) Don't get clever with client data
It's theirs, and anything that is done that makes it feel like the vendor is staking a claim will keep potential clients from becoming new clients.
10) Let there be a clear vision
A product that has a clear story behind it, and a clear vision fort the future is something worth believing in. A story that is a calculated exercise in developing a product against a formulaic set of rules (like these for instance) and whose only vision is a vc buyout or an IPO has no substance.
mmitII 