Tioga Venture Blog

Tioga Venture, Strategic Advisor to Pertinence-Intercim Merger

Tioga Venture co-founding partner Frédéric Halley played a key role in Pertinence-Intercim merger, providing strategic consulting services throughout the duration of the negotiations.

The combined company, Intercim LLC, will offer the industry’s most complete enterprise execution solution comprising Intercim’s manufacturing execution software (MES) and Pertinence’s state-of-the-industry manufacturing intelligence capabilities.

“This business merger truly emanates from Intercim’s and Pertinence’s greatest strengths: our mutual focus on customer success,” said Intercim President and CEO, John Todd. “The uniqueness of Pertinence’s causal and proactive analysis solution added to Intercim’s current suite of process planning, MES, emergent process and quality management capabilities fills a vital need for manufacturers of advanced products.”

The combined company will serve European customers from a new division, Intercim Europe, led by former Pertinence CEO, Amelie Faure. “The increases in IT budget allocations for manufacturing systems make this the ideal moment for a global leader to emerge,” said Faure.

“This leader will have to execute deployments for customers in different industries and on different continents, while maintaining unmatched levels of ease of use, quality and return on investment. Intercim is that leader.”

Click here to read the entire press release.

Business Objects Announces its Intent to Acquire Cartesis

Business Objects announces its intent to acquire Cartesis
A French leader strengthens its leading position in the BI market

We were very happy to see one of our long standing customers being acquired yesterday by Business Objects, a worldwide leader in BI.

From a top level standpoint, it shows that France can have great success stories in the software world; analyzing one level deeper, this great success relies on an excellent synchronization of 4 major factors involving a controlled level of risk:

Leadership: Didier Benchimol was able to set-up quickly a world class management team and to transform a service driven company into a leading international software company.

People: Cartesis built its reputation on the talent and recognized expertise of many key people with complementary values:
- In product: the internal architecture relies on the Integrated Data Model that provides numerous benefits for the CFO of continuously evolving large companies.
- In Sales: a strong application culture convinced many Fortune 500 companies that there is “value” outside of SAP, Oracle, etc.
- In Consulting: financial consultants were the preferred consultants in the finance department of large companies.

Market: The underlying market for performance management and governance control is a strong market, driven by the reinforcement of financial regulations (Sarbanes Oxley, etc.).

Investment: Gilles Rigal (Apax Partners) lead a consortium of investors and structured the deal in an LBO at the end of 2003 – at this time, it was quite innovative for software companies to be financed with debt.

Main points of the deal:
- Industry’s broadest platform delivering business insight and performance management for both the CFO and CIO
- Total transaction value of €225M (~$300M) in cash
- Expected to be neutral to slightly accretive to earnings for the first full year post closing and accretive thereafter
- Expected to close within 90 days

Congratulations to all the players who were involved in this great French success!

Comments from blogs we like:
Jacques Froissant's Altaïde
Julien Codorniou's Le Codorblog

A few links for more information:
Interview of Bernard Liautaud on Rodrigo’s blog
Cartesis announcement
Business Objects announcement
Journal du Net (en francais) - BPM: Business Objects doit-il racheter Cartesis?
Boursorama (en francais) - Business Objects: conclut l'acquisition de Cartesis

~Julien Mazerolle

Microsoft and its SaaS Offering

The future of software will leave a major role for SaaS (Software as a Service). That part is clear. All analysts agree on the trend. The debate is rather on the speed of adoption, which part of the market, what kind of application, etc.

Microsoft could not let this trend pass them by and they have obviously been working to bridge the gap with their faster and more nimble competitors (Google, Salesforce, Intuit …). Supposedly one of the cornerstones of their offering is Office Live. As very often with Microsoft, the name is perfectly confusing as Office Live has nothing to do with Office and one could even go so far as to say it is not really compatible with Office!! The service is targeted at small companies offering in a SaaS mode a bundle which is supposed to address all their needs: web hosting, email hosting, shared agendas and working spaces plus a few simple applications. We have been beta testing this since the US launch about 6 months ago. To give a simple appraisal: it has been a major disappointment.

Before getting into more details, Tioga Venture has simple principles for its internal IT: no software inside our walls, more precisely: no server software. Everything we use has to be SaaS. In term of vendors, we are completely agnostic and have used open source, Google, Microsoft. It is really about the value and service we receive.

First, the site is slow. Although performance has improved over the last 6 months, the performance of the site is at par with equivalent services. More importantly (and surprisingly), there is no way to connect or integrate with the application on your PC, no way to synchronize the online agenda with your outlook agenda. Even Yahoo has been offering that possibility for several years. As many people, I manage my agenda in Outlook and sync it with my PocketPC. So not synching with my agenda is just not an option.

The email offered is hotmail / live which is basically a decent webmail service (at least the latest live version) however, it is poorly integrated with the rest of Office Live: you just hop between two different sites. Bottom line, after 6 months of beta testing (for free), we have decided to drop it. To be honest, I am confused with what is the exact target Microsoft is aiming at with this service. The market for web hosting and basic email service is a commodity and Microsoft is late on this market. The least you would expect is that they bring additional value to their offer. And by the way, you can find Office 2007 online in SaaS mode. It is just difficult to find the address…

The good news is that we found a solution to our (simple and classic) problems: sharing agendas, contacts a few other info all while synchronizing with Outlook. And surprise, the solution is proposed by Microsoft! Or rather by its partners. We are migrating to a “Hosted Exchange” service with full SaaS, completely transparent, perfect integration with Outlook—functionalities that cover exactly what we needed. The surprising fact is that this offer is not really publicized by Microsoft. It took me a while to identify it and find the company who could deliver that. There is a cost but it is low and pay-as-you-go. I’ll tell you more after a few months of usage but I am optimistic.

Bottom line, I would not write off Microsoft’s effort in this space yet. However their approach to the market is somewhat puzzling.

~ Frédéric Halley

Microsoft IDEES ~ 1 (successful) Year Later

Last Tuesday (February 13th), Microsoft IDEES celebrated its first year in the French senate. IDEES is a very smart and successful initiative in which Microsoft helps 50 French software startups. They provide some funding but also access to Microsoft resources, both people and technology. Having been involved with several companies that are part of the program, I can confirm that the startups love it.

The program is very interesting for both parties: for Microsoft, it provides great PR. They even had TV advertising on prime time! They look like a cool company supporting the French software industry and help creating jobs in France (mostly high level R&D). They are also building the ecosystem for the future—also very good for their business. All that for a reasonable budget of allegedly less than 1M€. For the companies, it provides useful marketing dollars but also helps them to leverage the right resources within Microsoft (tough from France!). It also provides credibility in the sales process with large account both in France as well as internationally.

On a more political note, it was nice to see some key politicians (Fillon and Santini to name only two) being part of the celebration, even if the organizer was a much reviled US company. The political speeches were reasonably good and pragmatic, i.e.: supporting an initiative that helps French companies grow and become leaders.

For a detail account of the day, check Julien Codorniou’s blog. Julien is doing a great job at running the program.

~ Frédéric Halley

Tioga in the News ~ JDNet on the Etats Généraux de l’ASP 2007

After his participation in the Etats Généraux de l’ASP 2007, Tioga Consultant Thierry Aubert wrote an article for JDNet on his insights from the event.

ASP/SaaS : Une Maturité Croissante, Des Défis Qui Persistent

Le modèle économique de l’ASP/SaaS semble atteindre le niveau de maturité nécessaire pour se développer à grande échelle. Mais un certain nombre de défis restent à surmonter pour les acteurs de ce domaine.

Les États Généraux de l'ASP 2007, un événement majeur organisé par l'ASP Forum, furent une nouvelle occasion pour constater la maturité croissance du modèle économique ASP/SaaS. Au-delà des débats sémantiques sur le nom à privilégier pour ce modèle, force est de constater qu'un certain nombre de défis restent à surmonter pour les acteurs (éditeurs de logiciels, fournisseurs de services, hébergeurs...) souhaitant le mettre en oeuvre...

Cliquez ici pour lire l'histoire entier en français.

NOTE: This letter was also published on La letter de l’ASP. Click here to download.

~ Thierry Aubert

Hot News from 3GSM ~ Microsoft Launches Windows Mobile 6

With its latest operating system, Microsoft is promising improved search, better security and tighter integration with Windows Live services. But the operating system isn't Vista--it's Windows Mobile 6, the latest iteration of Redmond's software for powering mobile phones.

Microsoft plans on Monday to officially announce Windows Mobile 6, formerly code-named Crossbow, at the 3GSM trade show in Barcelona. The first devices using the software aren't expected until spring, however, with the bulk of products using the new operating system likely to come in the second half of the year.

Among the most visible changes is the ability to type in a few letters of a song, contact or e-mail subject and have the phone automatically show only matching results. The software also supports HTML e-mail. But for Exchange messages to be viewable in that form, a company also has to have Exchange 2007, the new version of Microsoft's e-mail server software.

Windows Mobile 6 also builds in support for Windows Live instant messaging and e-mail, which enables users to see whether a contact is online and to get their Hotmail or Windows Live Mail messages pushed down automatically.... Click here to read the rest of the story.

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À quelques heures de l'ouverture du salon international de Barcelone consacré aux plates-formes 3G, Microsoft a présenté la nouvelle version de son système d'exploitation pour smartphones et PDA communicants.

Le nouveau système pouir mobiles de Microsoft se décline en trois versions: Windows Mobile 6 Classic, Windows Mobile 6 Standard et Windows Mobile 6 Professional. Microsoft assure que Windows Mobile 6 garantit une rétrocompatibilité avec les logiciels développés pour la version précédente.

Par ailleurs, le système est totalement compatible avec Windows Vista, tant en matière d'échange de documents qu'en termes de synchronisation, là où Windows XP et Windows Mobile 5 ne communiquaient pas.... Cliquez ici pour lire l'histoire entier en français...

~ Julien Mazerolle

Web 2.0 for Companies: Social Software

Whichever way you look at Web 2.0, it relies on few new (or updated) technologies: blog, wiki, video, etc... and all their combinations to allow people to collaborate in an efficient way. What is interesting is that innovation in this wave is clearly coming from the consumer arena. That is a radical change from most of the previous technology waves: the PC and the web, to name only two, started in the corporate or defense/academic world before benefiting consumers.

A few weeks ago, I argued that Salesforce.com was really the new wave of the enterprise software. I still think that this is the biggest trend of the moment. However, a few small companies are trying to bring the Web 2.0 technologies principle and technologies from consumers to companies. One of the most interesting is Socialtext. It brings together blogs and wiki for collaboration. I really like their pitch and the product demo. In France, the buzz of the moment is on Blue Kiwi. At our anniversary party last Thursday, I cannot remember how many people were discussing them.

The issue all these companies are going to face is user adoption: are people ready to contribute and publish? And do so on a regular basis on top of their 'normal' way of working? In the last 5years, I have run and implemented many different collaborative solutions: open source content management, home made intranet, sharepoint portal, etc... After the initial enthusiasm, the issue is always the same: people get tired of having to 'post', in one form or another, their file to the new system.

Let me propose a solution which does not involve changing anyone's way of working: put a Google appliance on top of your file server. True, you won’t solve all the collaboration issues in a company, but you are solving the number one pain point: finding the right document when you need it. That may be one reason why Microsoft is so focused on enterprise search at the moment...

~ Frédéric Halley

ASP/SaaS: Industry Matures But Challenges Persist

As a co-speaker at the “État de l’Art” roundtable of the “États Généraux de l’ASP 2007”, a major event organized in Paris by the ASP Forum, I was happy to observe the increasing maturity of the ASP/SaaS business model, although it must be said that major challenges still exist.

From a quantitative perspective, Markess International confirmed the growth of the ASP/SaaS market, about to reach 1B€ in France (nearly 9% of the overall software and service market) and expected to grow at a 24% CAGR over the 2006-2008 period (vs. 14% for the overall software and service market).

From a qualitative perspective, it must be noted that most application software vendors offer an ASP/SaaS delivery channel for their products – and those who are not yet there have the opportunity to leverage the technology and business frameworks promoted by the likes of Salesforce.com, Microsoft or IBM to reduce their time-to-market and investment needs. On the demand side, Mr Didier Lambert, President of the CIGREF and Director of Information Systems at Essilor, reassured that large enterprises were open to work with ASP/SaaS providers, confirming that the ASP/SaaS model should not solely targeted the SMB market.

But let’s have a look at the persisting challenges. About the SMB market first—while the ASP/SaaS model has proven to be an efficient way to deliver application software, it must be recognized that the model does not inherently solve the go-to-market challenge: how to promote and sell cost-effectively to thousands or millions of small and medium sized businesses? Local distributors and VARs are not likely to disappear by tomorrow morning.

Implementing an ASP/SaaS business model also requires specific challenges to be addressed: financing the higher investment/cash needs (caused by the delayed revenue collection and upfront platform/service implementation costs), substituting or inter-working with an existing traditional business model (upfront license, yearly support & maintenance), etc. Although not trivial, these challenges are worth being addressed seriously, considering the value of revenue recurrence and the level of operational profits that can be generated once the critical mass has been reached.

~ Thierry Aubert

GMSV: Valley's New Leaders Coming from Overseas

Valley's New Leaders Coming from Overseas
Study Shows Immigrants Help Create More than Half of Area's Start-ups
By John Boudreau, Mercury News

Jan 4 2007 - Sudhakar Muddu left everything familiar in his homeland of India in 1990 to attend Yale University on a post-graduate scholarship. He later worked for IBM and Silicon Graphics. But he didn't leave family and home just to have his name in a company directory. He staked everything on the Silicon Valley Dream -- starting a tech company.

Leaving family is such a hardship,'' said Muddu, now on his second start-up, Kazeon, a 3-year-old Mountain View maker of search technology for businesses. ``So the dream is to make a mark, to prove something to your family and to the world.'' Muddu's story is replayed over and over in the valley, where, according to a study being published today, more than half of local start-ups established in the past decade were founded by people born overseas.

Click here to read entire story....

~ Laura Pauli

WSJ: Is Microsoft Driving Innovation Or Playing Catch-Up With Rivals?

Is Microsoft Driving Innovation or Playing Catch-Up With Rivals?

Dec 1, 2006 - Microsoft Corp. has put a mountain of money behind its Xbox 360 videogame system and is making another big bet on its Zune digital music player. And after years of research, the company Thursday set in motion one of its most important product launches with the release of its Windows Vista operating system to corporate customers.

But despite the company's marketing muscle, army of engineers and $7.5 billion annual budget for research and development, the software titan finds itself facing real competition on more fronts than ever before. Some threats, like Google Inc.'s ad-based Internet services, are new. Others, like the resurgence of Apple Computer Inc., are not.

As the computing landscape continues to evolve, is the world's largest technology company driving innovation or racing to catch up? The Wall Street Journal Online invited two tech bloggers, longtime Microsoft critic Dave Winer and former Microsoft "technical evangelist" Robert Scoble, to debate the topic. Their conversation, carried out via email, is below.

Click here to read the entire story...

~ Laura Pauli