Has SaaS become what it disrupted?

I read a piece about 2 weeks ago that gave me one of those moments. You know, when a whole lot of pieces fall into place and your mind races. I was entitled 

You Become what you disrupt

 Since that moment i’ve become increasingly aware of this trend in the SaaS world. (Its like when you buy a new car, suddenly all you see is the same car). Its my contention that SaaS has itself fallen foul of some of the very (bad) traits it set out to remove. All for sound economic reasons, but the proof is there.

 
Lock in – Force.com , Amazon.com, Google.com  (plus a whole bunch more ). Here’s a list of the glittering stars of SaaS, internet and PaaS. All going after lock in. Tim O’Rielly comments on the Google App Engine.

Keeping the internet as an open platform is a choice. We didn't understand what was happening to the PC ecosystem, but we've seen this movie before, so we should recognize and fight this plot line when we see it happen on the internet. We need to keep our cloud services vendors honest, and tell them we want an open, interoperable platform, not one based on lock-in.

 Bob on Smoothspan suggests that Amazon should more aggressively move toward lock in to further its financial success. Hmm,  I thought lock-in was so last decade? Isn’t one of the tenants of SaaS the way you can change vendors easily?

 Interoperability. Hey software vendors, get this. We want our applications to work together!  Have a quick think about why Microsoft desktop applications are so wildly successful. They did two things – 1) they made it simple to use. The leap from DOS to GUI was massive in making PC’s mainstream. Secondly they made all the programmes you commonly use work together on the same platform. Its my understanding that way back when they brought the various services like word and excel together one at a time (the argument about how successful this was done is irrelevant for most people). They made it easy to do.

 
Fast-forward to Monday, SaaS commentator Phil Wainewright went into overdrive about the SFDC / Google Apps integration. Saying a bunch of stuff including.

This is a showcase for on-demand integration. Salesforce for Google Apps is a close integration of two distinct on-demand application stacks, in which both applications can continue to follow their separate upgrade and evolution paths without breaking the integration.

(In the interests of honesty & integrity, so did I about Salesboom .)

But think about that. So basically your saying wow, you can integrate two apps together. Ummm so like integrating your SAP GL with CRM from Seibel. Or how about Payroll with Accounts. Ok, i’m assuming it happened a bit quicker, but the mere fact that Phil is trumpeting this as a major event is…well sad.  This isn’t new, way back it used to be called EDI, then that became unfashionable so it became integration, then webservices and the latest mashup. Sorry, but I would have thought in a 2.0 world this was EXPECTED.

 
Identity, look at what is going on here. The fact that OpenID exists is to address the same issue users have been fighting since application silo’s were in nappies. The nirvana here is single sign-on. IMHO Google’s suite of products is so useful because i’ve got identity federation across them. This still isn’t addressed. Take the iPayroll / Xero example above. They got database integration, no identity bit. To the best of my knowledge none of the vendors allow for single sign-on (does Force.com? Does anyone?)

 Proprietary systems – ok here (with one large noticeable exception) SaaS providers seem to be doing quite well. The ability to create customisations (widgets or whatever) seems to be quite universally applied. My question is (and the point of this post), for how long? Using history as an indicator, this free for all can’t last. For a couple of reasons. 1) Vendor share, someone will dominant and change this. You’ll be able to write customisations, but for one company not many. Then you’ll see a bunch of small companies writing auxillary apps for the core…force.com anyone? And 2) Commercial pressures, freeware just don’t cut it. Ad funded apps, well for the time being ok. But the relevance of Adwords is declining, surely that makes that model questionable?  Sooner or latter the market is going to come under pressure. That means a couple of things, consolidation and pressures to retain (lock in) customers…

 
So has SaaS failed in becoming like the old established players? Who has it failed? Was it all inevitable? Am i way off base?

 

Salesboom.com move makes a lot more sense

This one's for Rami at Salesboom.

 This week saw the announcement of Salesforce.com integrating with Google Apps. Ben Kepes covers it well here. The key point being that the announcement is a PR gag because the reality is that north of 90% of the enterprise  use MS exchange or lotus notes. To my mind it really misses the point 

So…. enter Salesboom.com. Who have come out with a Outlook Edition. As far as i can tell, its doing everything the salesforce thing does..but in a true enterprise app…

Nice one! 

There is no one solution

Last week I wrote the post “Isn’t the answer mobile?” which created a great deal of interest, commentary & thought provoking questions (most on the diversity.net.nz blog). Thanks to those who commented, some of what you wrote provides the basis for this post, as well as comments on Rod Drury’s blog post about fibre-co.

I guess the best starting point is to say last weeks post should have been titled “Isn’t PART of the answer mobile”.  It’s clear from both these posts that mobile technology alone won’t suffice, but equally importantly neither will fibre. The FibreCo idea is audacious, and the vision both compelling and energising (which i suspect is the major goal behind it), however it does have a few weaknesses. I’m not here to throw stones at it, because i love that at least someone has provided some constructive solution to our fast internet conundrum, what follows is my own attempt at it.

 

In my opinion FTTP (key being P not H) is only needed by a small (but hopefully growing) group of businesses. Not everyone needs a raging torrent of internet access, just like not everyone needs Mac trucks, PDA’s, high definition printers or computers at all. Hand in hand wit this, I must also admit that I’m not sold on the 1:1 causality that goes with the belief that ubiquitous fast, cheap internet access will drive economic benefits. I don’t see massive queue’s of ‘weightless businesses” just waiting for fibre, I also don’t see all the other fundamentals (like wages, taxes and support) being addressed to drive the weightless economy. Maybe its chicken & egg, but I’m not convinced.  Simon Arnold also asks if you need ubiquity in his comment on Rod’s blog

But if you go back and look at the source of the benefits being claimed by NZI that make up the $2.7-4.4 billion per year (see http://www.nzinstitute.org/Images/uploads/Broadband%20aspiration%20Sept%202007.pdf) most are able to be captured with much lower than the 75% penertration they are justifying the need for public investment off. I do think a bit of hard nosed analysis of marginal cost of provision versus marginal benefit is warranted.

 

Secondly, if you do need that kind of data through put, you should take Bwooce’s advice …

If you want fast internet access for your business, site your business appropriately. ….. Just as you may choose to live next to an airport, you may choose to live in an area with crap internet coverage

If I may extrapolate this out a little, you may want to even have the position that if fast, large bandwidth internet access is important to you, you should pay for fibre to be connected. The great news is that Telecoms cabinetisation program will make this more affordable. The way I read it (& again-not an engineer!) Telecom will be laying a lot of ducts & the distance to the Cabinet is going to be a lot shorter… so it should the cost of getting Fibre installed will decrease. This position should hold true if you are a business or consumer who wants IP TV.

 

Having said Fibre is just one of the solutions its fair to say that i believe ADSL broadband has a role in our future. For some its more than adequate. Again, as Bwooce says 24 mbps is plenty for email, internet, video conferencing etc. By that, it addresses the NZI’s ‘Telepresence’ and ‘Remote working’ economic benefits. (as a sidepoint even Cisco’s full monty Telepresence system only requires 15 mbps & , that’s way more demanding than a web-cam type approach!)  For digital media and other data intensive sectors is ADSL going to be enough? No, see point 1, buy fibre…

 

Mobile….I caught up with some folks about my previous mobile theory. According to them (the royal them) there area bunch of things you can do on a cell site like sectors, carriers & polarisation which all work to decrease contention, optimise spectrum use and generally make the experience better for the consumer & more economic for the carrier.

Despite popular opinion, ISP economics is important, if they can deliver services cheaper (and make an operating margin), then generally the price to customers will be cheaper, but its not all about price. Again, according to ‘them’, doing all these things could allow you to deliver speeds of up to 1 Mbps (maybe more). This speed would definitely improve if high demand users went to fibre. I know 1 Mbps ain’t fantastic against global benchmarks, but again for some it would be a great leap forward and more than suffice. I’m thinking of people on dial (and there are still nearly 700 000 of those) or old plans (256kbps for instance, again plenty of those) Tom Chignall of Vodafone commented on Rod’s blog 

We don’t need a fibre vision – we need a broadband vision which connects the people of this country to each other and to the outside world.…. Our view is that wireless has a major role to play…., The technology is in place today to deliver as good an experience as I get over my Telecom service (resold thro ugh Vodafone!)in Auckland’s central suburbs. Wireless speeds are doubling very soon and we have Telecom and NZ Comms entering the fray with similar technologies.

 

I agree with Tom’s major points , we need a vision that connects NZ to the world in the most appropriate way for them. I think this vision means when you buy a fast internet plan, you are going to have to make some choices based on your particular needs. If you are one of those companies or people feeling massively restrained by ADSL (financially, gaming wise, IP TV wise) then you are in one camp. If you get on the internet to ‘get the email’ like my mum, dial or mobile technology might be fine for you. The reality is though, what ever you choose, you should be aware that you are going to pay for it ….. there are no free rides. To me this is the crux of the issue for NZ . Just look at the links above, price isn’t the impediment (we’re cheaper than the OECD average), fast speeds are available, so why so many dial and low speed plans? No need for them?

 

 

For all those who did comment and weren’t referenced, your input did help, again many thanks

Is Google goneburger?

Just some musings, based on no facts but…. Is Goggle heading for trouble?  Despite all their product development efforts & a significant amount of hype, they still only have one revenue stream, advertising.

On top of that the word is that they are loosing staff in large numbers due to growth pains.

Finally, look at their strategic stance or lack there of. Who are they strategically aligned with? Perhaps more importantly who have they rankled? MS, Yahoo, Apple, Broadcasters, news companies….Wouldn’t a more prudent stance be to take on just one of these giants (by partnering with their enemy) at a time??

When the market realises that there are no new revenue streams, coupled with a large list of enemies what do you think that will de to the sharp rice? And without that kind if capital, how will they get out this hole? There are parallels to the dotcom boom/ bust companies here (IMHO).

 

Thoughts?