Software vendors today are fond of referring to themselves as the leader in this or that, as if saying this makes it so. But if any company can claim to be a market leader, how credible is the label?

More importantly, how does this label-mongering impact our customers? Should customers immediately buy from a company that anoints itself the market leader, or should they continue to scrutinize available solutions until they find the one that truly is best for them?

At this early stage in the on-demand revolution, there is considerable confusion in the market place. Software vendors are correct to be concerned about the adverse affect this is having on customers.

That's why I decided to organize a "What It Means to be the Leader in On-Demand" checklist. The below characteristics represent the barrier to entry for any company claiming to be the leader in its market category.

Domain Expertise, Technology Leadership and Innovation
Look for a company that exhibits technology leadership and a proven track record of innovation based upon the following criteria:

• Domain expertise - At the executive, engineering, service, sales and marketing levels, does the on-demand application provider you are considering have the necessary experience? Not in one discipline, but all. Yours is not an industry for on-the-job training.
• World-Class Engineering - Does the company have in place a technology leader/entrepreneur/visionary with a proven track record of leading engineering teams in building highly scalable applications? Is their technology commoditized or is exceptional as characterized by being patented or patent pending?
• Leveraging Open Source Technologies - Does the engineering team possess the technical skills to fully leverage the new software development tools and techniques associated with on-demand or software-as-a-service, including web services and service-oriented architecture (SOA) and cutting-edge web-based technologies. Check to make sure that they're not an enterprise vendor trying to reengineer their engineering team.
• The Need for Speed - Time to Market - How rapidly is the company able to bring products to market? The days of annual release cycles are over. Forever.
• Multi-Tenant Versus Single-Tenant Architecture - Multi-tenant architecture enables the sharing of all resources across multiple subscribers, providing a highly robust and scalable solution and offering high availability with failover. Lately, many legacy software vendors are slapping the on-demand label on hosted software offerings, when their solutions are still running on a single-tenant architecture. This approach has a number of problems, not the least of which is cost.
  
  Truly on-demand software is characterized by a web native, multi-tenant architecture that enables the software vendor to support a single line of code only, and spread its investment in hardware and security infrastructure across an entire installed base. The result is an incredibly cost-effective on-demand offering.

Product Functionality that Maps to Customer Requirements
Does product functionality map to customer inputs and requirements or are product solutions based upon an arrogant "we know what's best" attitude?

Real-Time, Web-Based Visibility
If it's on-demand, then it should deliver real-time, web-based visibility 24 hours a day, seven days a week, 365 days a year. If not, what's the point. Be careful of companies who say that they're real-time but actually they are batch processed overnight, over the weekend or longer.

Rapid Deployment, Rapid ROI
On-demand should translate into rapid deployment which in turn translates in rapid ROI. Deployments that are measured in months are no longer acceptable.

On-Demand Delivery Mechanism
Check to make sure it the on-demand solution is a 100% pure-play, on-demand application. Again, many pretenders are simply ports from an on-premise or enterprise application. They are not, and can not, be optimized for the web.

Advanced Hosting and Data Security
Is your on-demand provider's application hosted at a SAS 70, Type II certified telco-grade hosting facility? If it's not SAS 70, it's not true on-demand and your data may be at risk.

Integration and Partnership with Salesforce.com
Market leaders like to partner with market leaders. Check to make sure that the on-demand applications you are considering have been tightly integrated with Salesforce. If not, you're missing out on powerful potential synergies.

The real on-demand market leaders are pioneers, who view software-as-a-service as religion, not a catch phrase. My hope is that you will share this checklist with your customers and prospects and encourage them to be critical in their evaluation of vendors and products. In the meantime, leaders will continue to do what they do best: lead by example.


Christopher W. Cabrera, founder, president and CEO of Xactly Corporation, the leader in on-demand sales compensation management, is a noted industry expert in issues relating to sales compensation, enterprise and on-demand delivery models, and co-author of the April 2006 Wiley Publishing book "Xactly Sales Compensation for Dummies."