PaaS gets some monitoring and management tools finally

I’m really excited about Appsecute.com and their cloud management tools offering (Disclosure: I was so excited that I invested in them). The clever guys have been building out a set of tools to allow businesses to monitor and manage their PaaS applications. These have just announced their public beta offering today.

“In order to effectively adopt PaaS, however, organizations need tools which allow them to easily monitor and manage their PaaS applications – regardless of where they sit. Appsecute seeks to address this need for users of the popular Cloud Foundry
platform.”

This is a great step forward for the cloud foundry ecosystem, and shows the direction for PaaS in general. For some it will be seen as a catch up step for cloud, for others it will be a way for the IT department to regain some control of the cloud applications and more importantly have some long overdue visibility of the performance of their cloud application.

Like Enstratus has done for IaaS, the Appsecute offer fills a capability gap in the cloud ecosystem.  Interesting space this one…

PaaS – the game is on

Back in December I wrote a piece about how Cisco, through its partial acquisition of VMWare could make some very serious inroads into the PaaS market. Then in January the NYT leaked a story about how Cisco was getting into the server market, which in my view supported my hypothesis.

Today my RSS reader is loaded with bits about how IBM with its network partner (and arch Cisco rival), Juniper is extending its Blue Cloud construct.

Techchuck does a great job of describing it here, stating that the

“[technology will allow] businesses to install hybrid public-private cloud capabilities across IBM’s 13 "Cloud Labs" spread across the world. The companies have created technology that would allows enterprises to extend their private clouds to remote servers in a secure public cloud at the click of a button. Once the technology is installed in the Cloud Labs, businesses can easily switch clients workloads when resources become constrained...” My emphasis added.

 This is a great leap forward toward much more widespread adoption of Cloud computing as it addresses several issues for corporates (not SMEs) .

These being security and control. Juniper (and Cisco) are key players in Telco private network constructs, if you could extend your private network into the Virtual data Centre (VDC), then a major performance and security hurdle is overcome. After all you want the servers performance to feel like it would if it were in your LAN / WAN. It also addresses security because all that stuff is encrypted.

The second thing is control, read this from Mercury News

While many companies say they can deliver computing power on demand, most are using relatively old technology, analysts say. They aren't able to move software programs around the planet, dialing up a data center in Dublin, Ireland, when a server farm in San Jose reaches full capacity.

IBM demonstrated it can do exactly that at an event at its Silicon Valley Lab on Monday morning, as Rahul Jain, IBM's cloud architect, clicked on a box representing a computer in San Jose and dragged it over to a panel representing a data center in Dublin.

Notice how the CUSTOMER does this, not the service provider!!  This is gold because the customer feels like they are in control (which they are) and the service provider doesn’t have to have personnel doing it.

To me this is PaaS at a level of maturity that will significantly improve adoption. This is true convergence (network, IT, and services) in action. Most importantly it targets a segment (corporates) with money (banking excluded), who experience genuine costs and are willing to pay… wow an initiative with a viable business model!

How to make money from SaaS #2

This is the second part in a series on how to make money from SaaS. If you missed it, here is Part 1 (It also appeared on Cloudave here)

Step 4 – Create a plan

This is the critical step in the metamorphosis from idea to actual start up. Why? Because it's the bit that describes the "how", and that information is really really important to investors.

No matter what your product does, you are going to need money to make it real. If you can articulate the process by which you are going to build and operate the product. How you are going to sell and market the product, how the business is going to run, and hence how you are going to turn a profit, you are in a good position to get funding. IPO, private Equity or Angel…. understand which is best for you and go with it.

The plan will also help you focus your staff, there should be one clear message that you can tease out of the planning process. 'Get Big Fast' (Amazon) or 'A PC in every home' (Microsoft) are good examples.

Step 5 – SaaS companies should buy SaaS

For goodness sake use your own software, and take SaaS every other way you can, bar one application (and I'll get to that). You have to live and breathe this, experience the highs and lows from a customer point of view. That way you keep your upfront costs down, know first hand what a pain in the butt an outage is, and understand interoperation and single sign on from a customer point of view. I repeat Live and breathe it.

But, keep one on premises application. For a similar reason, so that you'll understand the highs and the lows and have a balanced view. Your sales people can use this… "we deliberately kept our XYZ application on premise so we'd remember…"

Step 6 – Think long and hard about how you will build your service

Sinclair Schuller of SaaS Blogs (and CEO of PaaS provider Apprenda) wrote an excellent dissertation on the many acronyms of cloud computing platforms. The key here is speed, economics and reliability.

I refer you to point 5 above. Be a SaaS company. In my opinion, there is no way you should build every element of your service, that would be fiscally irresponsible given the plethora of platform offerings available today.

This opinion is especially true of the underlying infrastructure that delivers your service. Think about what goes into building a geographically diverse, robust operating environment. You also need to think about how and where you are connected to the internet because it can significantly affect the end user experience. All of this costs and absorbs time. Why even do it? A good PaaS provider has also thought through such things as billing, API interoperation (Salesforce.com and Amazon) etc. All very important, and sometimes easily forgotten.

If you are going to build stuff you have a lot of different choices depending on what you have as a service

  • Build it all in house – do this in a proprietary system or opensource
  • Go PaaS and only build the 'special sauce' part.
  • Go IaaS, build the OSS/BSS layers plus the special sauce

Any approach you take is going to have its pros and cons. To me the most critical part is to understand your costs and cash burn rate. Then look really hard at the numbers and seriously, in your heart of hearts, ask…. can we make money doing it this way. If the answer comes back positive go for it, if the answer is negative or marginal, consider the alternatives above.

 

Thoughts on SaaS aquisitions

Over on Smoothspan, Bob asks the question “when do the SaaS acquisition games begin?”. This got me thinking, about the why, who’s, how and impact of acquisition on SaaS.

Firstly, I agree with Bob, the market is young & fragmented. The impact of this on acquisition is quite profound. People will acquire for position rather than to consolidate because the market is still growing. In a new growing market there are only two strategy plays that really matter. A race strategy (get the most customers as first as possible). Salesforce.com is doing this with its PaaS play. If you win the race you can turn the strategy into a position strategy (we dominate, have the most customers, are the most attractive to partners, new entrants, or have deep pockets for acquisition etc, have the most differentiation because of this is hence retain the position). Microsoft runs a position strategy for desktop apps.

Back to acquisition.  If you are already in the SaaS game, you are probably in a race strategy. Therefore if you have achieved a lead (to some degree) you may be looking to acquire to get further in the lead. Effectively buying customers or technology that will give you more customers (has a wow factor or fills out your stack & removes an objection). SF.com buying Kieden is an example.

If you are a SaaS player & haven’t got a lead, then you should be looking to be bought or you need to think about specialisation. You are loosing the mass market horizontal race so stop trying.

If you aren’t in the SaaS game, otherwise known as ‘being disrupted’, then you are looking to acquire a horse already in the race. The rumoured Oracle SF.com tie up is a good example of this.

If you subscribe to my two strategic views above, none of the acquisition moves are surprising. 

To me the most interesting part of the acquisition trend is what the acquirers do with the acquiree when they’ve got them. That is how well do they use the new asset to deliver on the strategy.  Both have they’re challenges.

If you are a SaaS provider on your own infrastructure (platform) then you are going to be forced with the challenge of integration. This is different from ’making them work together’ which should be fairly easy given that AJAX & webservices are cornerstones of SaaS & there are many instances of this around. But integrating two applications & databases onto the same platform is a big challenge to me. Identity management, billing, reporting, management ,  the DNA of the code itself make this a challenging task.

If you are a SaaS provider on a platform like Apprenda or SF.com then the integration task is easier, markedly easier. All (ok most) of those technical details go away because you are already integrated in the backend.These two plays also have the benefit of culturally being aligned behind SaaS, having a channel & billing model that is optimised for SaaS perhaps most importantly management. & remuneration models that support SaaS.

Legacy providers have a different set of challenges once they have acquired. Do they integrate it into the they’re legacy product like the S+S by Microsoft play? how do they run the business, how do they sell it , how do they manage the cannibalisation or disruption of the legacy business if they’ve bought an app in they’re existing space (Siebel & SF.com for instance). Perhaps even more importantly, how do they maintain focus on SaaS while running a legacy business.

Those who read my blog will know that I’m very hot on this. In my opinion if you don’t run the startup separate from the legacy, then the mothership will negativity impact the new entity.

Here is the analogy. Farming. Farmers know that the game is cyclical, that the tree’s that provide the most produce now are only good for a limited time and that they need continuously have new crops or replacement tree’s coming on board.  Those tied to cash crops for survival understand that they are in big trouble. Over farming means that eventually the tree will wither. If you continue with this behaviour, you will turn your land into a dessert (the Sahara is an example). Continuing on with this analogy. Those farmers that do have replacement tree’s usually grow them in a separate paddock. They do this so that the new plants have the best chance to thrive. The seedlings get the appropriate attention and aren’t shaded by the large trees.

Not rocket science and yet business continuously fail to adhere to this most basic wisdom. They often throw their innovation centre in with the rest of the business and expect it to survive (read the innovators dilemma for examples). When the harvest comes due (i.e. reporting season), these companies  run to the big revenue levers and neglect the startup, so it fails to hit its numbers and disappoints. Why? The people who know how to look after big tree’s often don’t know how to look after seedlings, or even worse see the seedling as a threat and actively work to stunt its growth.

All of this points to the obvious decision not to integrate the new SaaS acquisition into the legacy business. If the legacy business is serious about winning the race in the SaaS game, leave it alone. Let the SaaS business come to you with they’re requirements & give your legacy business targets & remuneration models that support this race.

Is SaaS more than just the app?

I’ve been thinking a bit about the trends going in the SaaS world and I can’t help thinking that we are all missing a trick or two.

Firstly lets get the rough tends out of the way.1) SaaS is becoming more mainstream and is being adopted all along the company sire continuum. 2) platforms and PasS are increasingly important. 3) Big players in software and Telco are moving into this space. 4) SOA isn’t separate but intrinsic to SaaS 5) market consolidation

 {mosimage}

My problem is that all of this activity is focused on the application or platform. The picture above is from Force.com and is a great example, Apprenda another. This focus doesn’t actually take into account the end user experience. It also doesn’t give the user any service level guarantee’s.

In this second diagram I’ve painted a simple picture of all of the elements involved in the end user experience (and by proxy their satisfaction with SaaS). You will notice a whole lotta real-estate between the platform and the end user which is unmanaged. What is the point of a five 9’s datacentre and platform if the net is down, the router on the fritz or there’s an issue with the end device.

{mosimage}

To my mind a good SaaS provider should be interested in this additional real-estate. It represents a space that If MANAGED could be a point of differentiation. A way to get the mass of the adoption curve past their current hurdles and a way to provide businesses (who are putting up mission critical information into the cloud) some sort of SLA (and by association reassurance). It also represents the next evolution of maturity in the SaaS model, SLA’s. Its because of this that I think the increasing involvement of ICT businesses (typically Telco’s who are playing in IT ) in SaaS is of massive importance. It seems to me that they alone can put all these bits together and hence provide the SLA’s that must eventuate.

Thoughts? 

Are SaaS and social networks the same thing?

Perhaps the correct question is,” will they be the same thing?” IT people love to categorise things, It helps us organise and understand a very fast changing and increasingly complex world. Sometimes though, it doesn’t always do us any favours.

I think that there is convergence between SaaS and social networks (effectively making them the same ‘thing’). I think that this will become increasingly the case. Here’s why.

 Both are webware or internet delivered services. They are both heavily influenced by web 2.0 technologies. The good ones both allow for mashups and user generated alterations. In the SaaS world they are increasingly addressing the integration with other applications and platforms. Social networks are all about PaaS (integration) and only recently have they been about applications. Both need scale to be successful and in both cases scale is about eyeballs and identities. This make sense as revenue and increased market value is driven by these two factors. They share similar user patterns too. Unlike traditional Software which you use because you bought it (or someone else did). You pay for these services because you use them! And….the more you use the application or network the more you continue to use it (its quite self fulfilling). There is value to both of bringing in networks be they suppliers or friends. Both are a real Trojan horse. I mean why would you, or how could you move when everyone you knew is in one place? This is especially true if it was you that invited them in…

Both are trying to address the same financial hurdles; that is what is what is my value and how do I make a profit. Similarly, standards are only just emerging. Google’s Opensocial , Force.com  and the Microsoft SDK announcement are all indicators of this.

Any way you get the idea. I think we should stop thinking about these two web 2-0 trends as distinct entities and start viewing them as a converged offering. I doing so you expend your market mindset, develop in different ways and treat users in a different way. The perplexing thing will be how we manage the identity collision I that is what happens when a consumer becomes a business person and via versa …