On-demand isn’t just about the application, its about the complete stack of componentry required to deliver the solution.
I say this because i see an interesting dichotomy in action in the SaaS (on demand) market. Many vendor seem to get the application themselves into pretty good shape for delivery on demand, and forget about the bits and pieces it runs on.
Here’s a classic example by Intuit. If they’d embraced their own mantra about subscription based services, taken a grid computing or ondemand infrastructure solution from a platform provider could they easily boost their capacity to match these peaks? Hell yes. Why didn’t they? I can only guess but it would seem that like quite a few of the application vendors i see, they think the value is all in the app. That’s missing the point.
The value of any application or service is in what customers (the end users who pay the bills) can do with it.
That means that the outcome that a customer buys, is not solely based on the application (that just like all of history, every solution is only as good as the weakest point). A good many SaaS providers should think about this more.
So, what is the value of a hosting provider?
Depends on their own go to market play but it could be any of the following
Robust infrastructure, capacity planning, redundant internet links, pre prod etc
Operational support processes and teams who understand that they need to focus on the system not just the end customer
Reach, apex type platforms can expose a new ISV to a wider customer set that their limited marketing and sales budgets couldn’t achieve
Identity management, yip the ole single sign on and administration chestnut
Billing (if you let them)
API’s or webservices to integrate with other apps on the platform (to solve the limitations of your offering
Customer credibility – SaaS can be daunting enough without providing uptime type assurances.
Economies of scale
I think for this reason you will see more and more hosting plays, what interests me the most is ‘the who’ element of hosting plays. You’ve got Google and MS supposedly putting out global coverage of Data Centres (hosting 1.0 in my opinion), you have Telco’s who control the pipes and know scale and data centres (but beggar all about services and service delivery) and then you have the SaaS vendors themselves who understand applications and their interactions.
Interesting future landscape here.