When we first started getting in to SaaS back in 2004, there were a lot of companies still looking for shortcuts in to the space. Virtualization and terminal services were seen as a way to take your current app and "voila", turn it in to a SaaS offering. Three years later, I cannot think of one company that has been successful in the market using these types of services instead of trying to create true multi-tenant native web applications, yet we see many companies looking to repeat those mistakes with Web Services.
(That said, I have seen some companies successfully navigate a transition strategy. By artfully employing multi-instance versions of their code with Web Front ends, a number of companies bought themselves some time to make the move in to a true SaaS offering.)
Today the big rush is to offering your App as a Web Service. A couple of our customers such as Visual Mining and Fliqz were built from the ground up to be integrated into other apps as their primary vehicle. Many other people want to add that capability.
This is more than just using Web Services to integrate with apps behind the firewall (such as Boomi helps companies do.) It's actually designing your app to be a part of other apps. Amazon is doing it, so is Facebook with F8, now everyone wants on board.
And they are looking for quicks ways to get there. Mention Web Services to a SaaS company and they immediately want to know how they can use that to make their app available for Mash-Ups. So much so, many companies (including OpSource) are rushing to develop and deploy those tools.
Will those tools be valuable assets in offering applications as Web Services, or will they be the second coming of Terminal Server, a non-functional solution designed to hold analysts, customers and press at bay? My guess is that it will depend. If it's just a quick and dirty way to get in to Yahoo Pipes, then we've read that book. But if the tools add value above and beyond the app (such as providing pre-built marketplaces or new functionality) we might see them become an integral part of tomorrow's applications.
Tuesday, September 4, 2007
Friday, August 3, 2007
Door Close Buttons
So I use Good Mail to get mobile e-mail on my BlackJack. I find it much more usable than the mail client in Windows Mobile 5 to get my exchange mail, and the good people at Cingular have yet to offer Windows Mobile 6 (can you imagine if I couldn't upgrade my Mac to Leopard because my ISP wouldn't allow it?)
While I generally find Good to be a very workable system, sometime the system does get jammed. No new e-mails come in, even though I know I'm receiving them. Whenever this happens, I use the "Send/Receive Now" command. In the three years I've been using Good (back to my old Treos,) that has never worked. Sending an e-mail to myself usually does the trick.
I was trying to figure out why I do it every time when it doesn't work. It reminds me of the door close button on an elevator. Never once have I hit that button and actually had the door close. Some people claim that it works for them, but I think it's mostly they happened to hit the button when the door was going to close anyway.
This led me to thinking about all types of buttons that we have in the computer world that don't do anything. I've got a print screen button on my keyboard now. Hitting it doesn't print the screen. Maybe it did back in the old MS-Dos days (though I don't remember that ever working back then either) but it definitely doesn't now. I don't even know what the Scroll Lock and Break buttons were ever supposed to do. Yet they sit their mockingly on my keyboard asking to be pushed.
I think a lot of software and hardware has these types of "Vestigial Buttons." Features or devices that once meant something but never really got used or are currently meaningless. They seem to be more of a problem with traditional installed applications than web apps, but I don't know for sure if that is a function of the constant updating of the web allowing for more pruning or that the apps are just newer and haven't evolved enough yet to have "Vestigial Buttons."
Often these types of features clutter up the interface and actually make the application less usable. The creators of the apps often convince themselves they are important when they are at best a distraction in using the app and at worst a deterrent to adoption all together. How many people get frustrated like I do with hitting the "Send/Receive Now" button and have nothing happen. Even though the app works fine, I think of it as being permanently broken. Not where Good wants to be.
While I generally find Good to be a very workable system, sometime the system does get jammed. No new e-mails come in, even though I know I'm receiving them. Whenever this happens, I use the "Send/Receive Now" command. In the three years I've been using Good (back to my old Treos,) that has never worked. Sending an e-mail to myself usually does the trick.
I was trying to figure out why I do it every time when it doesn't work. It reminds me of the door close button on an elevator. Never once have I hit that button and actually had the door close. Some people claim that it works for them, but I think it's mostly they happened to hit the button when the door was going to close anyway.
This led me to thinking about all types of buttons that we have in the computer world that don't do anything. I've got a print screen button on my keyboard now. Hitting it doesn't print the screen. Maybe it did back in the old MS-Dos days (though I don't remember that ever working back then either) but it definitely doesn't now. I don't even know what the Scroll Lock and Break buttons were ever supposed to do. Yet they sit their mockingly on my keyboard asking to be pushed.
I think a lot of software and hardware has these types of "Vestigial Buttons." Features or devices that once meant something but never really got used or are currently meaningless. They seem to be more of a problem with traditional installed applications than web apps, but I don't know for sure if that is a function of the constant updating of the web allowing for more pruning or that the apps are just newer and haven't evolved enough yet to have "Vestigial Buttons."
Often these types of features clutter up the interface and actually make the application less usable. The creators of the apps often convince themselves they are important when they are at best a distraction in using the app and at worst a deterrent to adoption all together. How many people get frustrated like I do with hitting the "Send/Receive Now" button and have nothing happen. Even though the app works fine, I think of it as being permanently broken. Not where Good wants to be.
Tuesday, July 24, 2007
SaaS and HA
Bit of a buzz last week about how NetSuite was IPOing even though it didn't have a back-up datacenter. This came as a surprise to many in the press, analyst and investor world, but it shouldn't have. As the guys over at Saugatuck Technology pointed out, this is the most likely case. Most SaaS vendors have no multi-site capabilities. Even SalesForce.com didn't have a second center until well after it IPO'ed.
Even their NetSuite's customers were surprised by this. (Though one customer, namely OpSource, was not.) Seemed they couldn't figure out why for their $500 per month they wouldn't be receiving multiple datacenter support.
The reality is that traditionally running multiple datacenters is very hard and very expensive. Not many companies really get diversity before $100m in revenue. The reason being that running two centers is more than twice as expensive as running one center. Not only do you have the costs of both centers (with much lower discounts than you would get by massing your buying power) you have the costs of running all the HA software, hardware, and network connectivity to keep the two datacenters in sync. And how much extra functionality can you sell your customers with both of those centers? None.
You might say that customers are willing to pay more for increased availability. They won't. The fact is a well run single instance of your application should have at least 99.95% uptime. Getting a couple extra 9's won't get the customer pulling out their wallet.
And in a cruel twist of fate, multiple datacenters can actually cause more downtime. The hardest thing in IT is to sync multiple instances of an app. Ask SalesForce, who had the most trouble with their availability right after implementing a second site. Anyone who has tried it knows how tough it can be.
When you factor the costs and the difficulty and the lack of true customer demand, it's no surprise that most SaaS companies don't have a second center until they have over $100m in revenues.
What's the answer then? I think it's going to be a big part of switching from traditional enterprise application development and deployment, in to true web development. By abstracting their app from the physical layer and truly living on the web, companies can much more easily take advantage of multiple points of presence. The tools are just beginning to arrive (of course we've got some) but we'll see even more be done on this over the next couple of years. Companies who take advantage of these tools and offerings will get HA built in without having to break the bank.
Even their NetSuite's customers were surprised by this. (Though one customer, namely OpSource, was not.) Seemed they couldn't figure out why for their $500 per month they wouldn't be receiving multiple datacenter support.
The reality is that traditionally running multiple datacenters is very hard and very expensive. Not many companies really get diversity before $100m in revenue. The reason being that running two centers is more than twice as expensive as running one center. Not only do you have the costs of both centers (with much lower discounts than you would get by massing your buying power) you have the costs of running all the HA software, hardware, and network connectivity to keep the two datacenters in sync. And how much extra functionality can you sell your customers with both of those centers? None.
You might say that customers are willing to pay more for increased availability. They won't. The fact is a well run single instance of your application should have at least 99.95% uptime. Getting a couple extra 9's won't get the customer pulling out their wallet.
And in a cruel twist of fate, multiple datacenters can actually cause more downtime. The hardest thing in IT is to sync multiple instances of an app. Ask SalesForce, who had the most trouble with their availability right after implementing a second site. Anyone who has tried it knows how tough it can be.
When you factor the costs and the difficulty and the lack of true customer demand, it's no surprise that most SaaS companies don't have a second center until they have over $100m in revenues.
What's the answer then? I think it's going to be a big part of switching from traditional enterprise application development and deployment, in to true web development. By abstracting their app from the physical layer and truly living on the web, companies can much more easily take advantage of multiple points of presence. The tools are just beginning to arrive (of course we've got some) but we'll see even more be done on this over the next couple of years. Companies who take advantage of these tools and offerings will get HA built in without having to break the bank.
Monday, June 25, 2007
SaaS and the Shop Foreman
Recently at the Progress Software Partner Summit, it was stated that certain type of users wouldn't buy SaaS. Interesting enough the type of person who was used as an example was the Foreman of a Machine Shop (Progress Partners include some of the most interesting vertical players.) I found this argument false for two reasons.
First of all was the assumption that less technical users wouldn't be comfortable using a web based app instead of installing traditional software. (Not that shop foreman are necessarily less technical, but that was the assumption for this example.) I think the reason the web has become so widely adopted is it is a much easier form of technology consumption than traditional software, hence new users are far more comfortable with it. How many times have you seen someone who couldn't do the basics on a computer except web surfing and e-mail. My father spends 4 hours a day on his computer playing fantasy sports, but didn't know how to save a file in a traditional app. If anything, less intensive computer users will favor using the web over trying to install anything.
Secondly, even if today there are certain users who favor traditional installed software, that is not going to be the case for the next generation. The youth of today, who will be the business users of tomorrow, are going to look for everything on-line. Look at what has happened to Educational Software sales. Between 2000 and 2003 educational software sales fell in half. I'm sure those numbers have dropped even more in recent years. While my nine year old daughter had a drawer full of games, and my seven year old son had one or two, my 4 year old has never done anything but go on-line (I'll do another post some day about the genius of Club Penguin.)
Regardless of the jobs this next generation goes in to, they are going to expect to consume technology the way they have their entire lives, through on-line applications. And considering that the first of the Net Generation of kids is just beginning to hit the job market, software companies that don't deliver on-line will be in serious trouble.
First of all was the assumption that less technical users wouldn't be comfortable using a web based app instead of installing traditional software. (Not that shop foreman are necessarily less technical, but that was the assumption for this example.) I think the reason the web has become so widely adopted is it is a much easier form of technology consumption than traditional software, hence new users are far more comfortable with it. How many times have you seen someone who couldn't do the basics on a computer except web surfing and e-mail. My father spends 4 hours a day on his computer playing fantasy sports, but didn't know how to save a file in a traditional app. If anything, less intensive computer users will favor using the web over trying to install anything.
Secondly, even if today there are certain users who favor traditional installed software, that is not going to be the case for the next generation. The youth of today, who will be the business users of tomorrow, are going to look for everything on-line. Look at what has happened to Educational Software sales. Between 2000 and 2003 educational software sales fell in half. I'm sure those numbers have dropped even more in recent years. While my nine year old daughter had a drawer full of games, and my seven year old son had one or two, my 4 year old has never done anything but go on-line (I'll do another post some day about the genius of Club Penguin.)
Regardless of the jobs this next generation goes in to, they are going to expect to consume technology the way they have their entire lives, through on-line applications. And considering that the first of the Net Generation of kids is just beginning to hit the job market, software companies that don't deliver on-line will be in serious trouble.
Tuesday, June 5, 2007
EuroSaaS
Last month I went out to Europe and was dismayed at the state of the SaaS market out there. Seemed there was still a lot of confusion about the meaning of SaaS. I had heard of one "SaaS" event that included SAP, an Integrator, and a Hoster. It was actually an event on hosting SAP.
I was hoping that the market would have gotten past the point of confusing Hosted Applications and true Software as a Service. It seemed it would be another 6 - 12 months before we started seeing real traction.
It seems I was overly pessimistic. I just got back from SIIA's On-Demand Europe Conference. There were a number of EMEA based SaaS companies doing interesting stuff from companies like Wesupply doing supply chain management, Lecayla doing billing and metering, and Clarizen doing project management.
Even more exciting than the number of SaaS companies already based in Europe was the level of discussion. Instead of bemoaning how European Enterprise would not buy SaaS, the companies instead were excited about new ways to go to market, partner and bring in value. The level of discussion was on par with most US based SaaS conferences.
Needless to say, I know we are going to become much more agressive in selling and delivering in Europe. It will be great to see the market develop over the next few months.
I was hoping that the market would have gotten past the point of confusing Hosted Applications and true Software as a Service. It seemed it would be another 6 - 12 months before we started seeing real traction.
It seems I was overly pessimistic. I just got back from SIIA's On-Demand Europe Conference. There were a number of EMEA based SaaS companies doing interesting stuff from companies like Wesupply doing supply chain management, Lecayla doing billing and metering, and Clarizen doing project management.
Even more exciting than the number of SaaS companies already based in Europe was the level of discussion. Instead of bemoaning how European Enterprise would not buy SaaS, the companies instead were excited about new ways to go to market, partner and bring in value. The level of discussion was on par with most US based SaaS conferences.
Needless to say, I know we are going to become much more agressive in selling and delivering in Europe. It will be great to see the market develop over the next few months.
Friday, May 25, 2007
The Suits at OSB
If I'm doing a lot of references back to conferences in my latest posts, forgive me. We tend to write about what we know, and it seems the last 3 months, all I know is conferences.
That said, a very interesting observation from this week's OpenSource Business Conference. I don't usually attend OpenSource events, but the idea of the community and how it might impact the SaaS world was fascinating me. Plus it gave us the opportunity to meet with our critical partner, MuleSource (and have a couple of beers with the great Dave Roberts of Vyatta.)
That said, I figured I'd better wear jeans in order to get accepted with the OpenSource crowd. Unfortunately, I couldn't because of an earlier customer engagement. So at least I left my sports coat in the car.
When I got in the conference, I had to check if I was in the right hotel. Most people were wearing jackets and slacks, and I even saw some suits. This was OpenSource? When I commented on the formal (for the valley) attire, I was reminded it was the OpenSource Business Conference. I hadn't realized the seriousness of the gathering.
I will say I was a bit disappointed. When I worked at GlobalCrossing and MFN I saw them try to become just like AT&T and SBC. Trying to mix new company products with old company style ways of doing business was disastrous. You had none of the consistent revenue stream and institutional history of the old business's, and you sucked the enthusiasim and innovation out of the new business. Both companies suffered mightily.
Hopefully the same won't happen with many of these next generation companies. They will realize that selling to traditional business is as much or more about getting traditional business to change than it is about adapting to their old ways of doing things. Not that I mind the sports coats (it is my usual attire) but I hope losing the jeans doesn't mean losing the passion for changing the way things get done.
That said, a very interesting observation from this week's OpenSource Business Conference. I don't usually attend OpenSource events, but the idea of the community and how it might impact the SaaS world was fascinating me. Plus it gave us the opportunity to meet with our critical partner, MuleSource (and have a couple of beers with the great Dave Roberts of Vyatta.)
That said, I figured I'd better wear jeans in order to get accepted with the OpenSource crowd. Unfortunately, I couldn't because of an earlier customer engagement. So at least I left my sports coat in the car.
When I got in the conference, I had to check if I was in the right hotel. Most people were wearing jackets and slacks, and I even saw some suits. This was OpenSource? When I commented on the formal (for the valley) attire, I was reminded it was the OpenSource Business Conference. I hadn't realized the seriousness of the gathering.
I will say I was a bit disappointed. When I worked at GlobalCrossing and MFN I saw them try to become just like AT&T and SBC. Trying to mix new company products with old company style ways of doing business was disastrous. You had none of the consistent revenue stream and institutional history of the old business's, and you sucked the enthusiasim and innovation out of the new business. Both companies suffered mightily.
Hopefully the same won't happen with many of these next generation companies. They will realize that selling to traditional business is as much or more about getting traditional business to change than it is about adapting to their old ways of doing things. Not that I mind the sports coats (it is my usual attire) but I hope losing the jeans doesn't mean losing the passion for changing the way things get done.
Monday, May 7, 2007
Web 2.0 <> Jerks
I've been saying a lot lately that you can tell things are getting good because the jerks are back. 24 year old entrepreneurs who think the world did not exist before ValleyWag and have a shiny new Series A term sheet to prove it. We're just short of having meaningless demo conferences in the desert with thousands of booths populated by incredibly good looking "marketing coordinators" right out of school who can with a straight face swear their PokeApp really is more than five lines of PHP script creating a weather widget, it's the next coming of Google. Once that happens, we'll know we've really made it.
That said I had two very good meetings last week with some companies that are really on the cutting edge of the burgeoning field of utilizing web services to build applications. Dave Rosenberg, CEO of MuleSource, and Oren Michels, of Mashery. Both companies are on the cutting edge of how we take we extend the mashing up of applications beyond the class projects of layering Google Maps onto a smell database of the New York City Subway System and in to real offerings that support business level availability, billing and support. Anybody interested in how to make this work in the real world could definitely do worse than start by talking to these companies.
What struck me about meeting these guys was how we are beginning to see a new breed of entreprenuer and CEO; one who understands the technology and community power of Web 2.0 but who also are grown ups who can discuss business and how to make this all work for real companies. Up to now it seems that many people working on SaaS and Web Applications fell in to two catagories. The first are software guys who don't understand that this is all about the Web for business, not coming up with a new pricing scheme for their old products. The second were guys who have no real world experience and think the whole world revolves their latest Web 2.0 applet, or more simply put jerks.
It's guys like Dave and Oren that I think really differentiate this new wave of technology from the last one. They both really understand the technology and what it's going to take to make real business's work with it. This new breed of entreprenuer is far more visionary than the traditional software guy, but knows that you can't be a jerk if you want to create the long term relationships necessary to build these businesses. Oren is so balanced, he even called me for being a little over enthusiastic about what we do and how great it was (not that I've ever been called a jerk myself.)
It's exciting, because I think that means companies who realize the potential of these technologies will have a much better chance of succeeding this time around. Plus, they'll be a lot more fun to work with.
That said I had two very good meetings last week with some companies that are really on the cutting edge of the burgeoning field of utilizing web services to build applications. Dave Rosenberg, CEO of MuleSource, and Oren Michels, of Mashery. Both companies are on the cutting edge of how we take we extend the mashing up of applications beyond the class projects of layering Google Maps onto a smell database of the New York City Subway System and in to real offerings that support business level availability, billing and support. Anybody interested in how to make this work in the real world could definitely do worse than start by talking to these companies.
What struck me about meeting these guys was how we are beginning to see a new breed of entreprenuer and CEO; one who understands the technology and community power of Web 2.0 but who also are grown ups who can discuss business and how to make this all work for real companies. Up to now it seems that many people working on SaaS and Web Applications fell in to two catagories. The first are software guys who don't understand that this is all about the Web for business, not coming up with a new pricing scheme for their old products. The second were guys who have no real world experience and think the whole world revolves their latest Web 2.0 applet, or more simply put jerks.
It's guys like Dave and Oren that I think really differentiate this new wave of technology from the last one. They both really understand the technology and what it's going to take to make real business's work with it. This new breed of entreprenuer is far more visionary than the traditional software guy, but knows that you can't be a jerk if you want to create the long term relationships necessary to build these businesses. Oren is so balanced, he even called me for being a little over enthusiastic about what we do and how great it was (not that I've ever been called a jerk myself.)
It's exciting, because I think that means companies who realize the potential of these technologies will have a much better chance of succeeding this time around. Plus, they'll be a lot more fun to work with.
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