Here’s Gartners Predictions about SaaS

I’m a little reticent to put up this kind of research given my previous post about how research houses themselves were being disrupted. But here are the top predictions from Gartner .

 

  1. By 2010, 15% of large companies will have started projects to replace their ERP backbone (financials, human capital management and procurement) with new service-oriented architecture [SOA] and SaaS-based solutions).
  2. By 2012, business process management suites (BPMSs) will be embedded in at least 40% of all new SaaS offerings, as providers strive to make business processes explicit and mass-customizable by their customers.
  3. By 2012, more than 66% of independent software vendors (ISVs) will offer some of their applications optionally or exclusively as SaaS.
  4. By 2010, 85% of SaaS vendors will offer uptime service levels of 99.5% or beyond in standard contracts, as well as performance SLAs.
  5. By 2009, 100% of Tier 1 consulting firms will have a SaaS practice.

Reading these I actually don’t have too much to argue with. In fact they seem to cover topics i’ve posted on previously.

I absolutely agree that if SaaS is going to mainstream (point 1) then service level agreements will be a requirement. Quite how this fits with an Internet delivered service could be quite a conundrum for many ISV’S. I personally think it opens up some massive opportunity for Telco’s. Phil Wainwright speculates that 2008 could be the yr that Telco’s crack SaaS but because of their ability to deliver utility computing. I think that utility computing coupled with an ability to deliver end to end SLA’s .

 
The prediction about BPMS i don’t quite get. Coupled with consulting yes but it would seem to me that getting to ‘mass customisation’ kinds defeats the purpose (and value) of SaaS.  See my post about customising the code or change the business for more on this.

The number’s of ISV’s in the SaaS game is an interesting prediction. That is a huge amount of change in yrs – cultural, skill and channel. I would suggest that those companies with SaaS development and deployment (like Force, Microsoft and apprenda) platforms are in for a helluva few years too.

 

What does MS open sourcing .net have to do with SaaS?

I'm willing to bet that the announcement by Microsoft today that they would opensource their .net application went fairly unnoticed by the wider SaaS community. I think this is a grave mistake and a fundimental unestimation of Microsofts attempt to get into SaaS big time (in their own way according to Phil Wainwright)

Marshall Kirkpatrick on R/WW states that " It's hard to say what the incentive was for this move" and openly admits that they at R/WW are "still chewing on the significance of this announcement"

Well here's my pick. It links nicely with my bit about opensource and SaaS from the other day. Stay with me because this is a little convoluted.

.Net is a critical component of Microsoft's web services play. One of the key ways that Microsoft has commercialised it and is using it in a SaaS way is through its Connected Services Framework .   Here's where SaaS companies should sit up and take notice.
 
CSF is being sold to Telco's as the underlying framework to connect communications AND SERVICEs together. Its a platform, a webservice platform to make a Telco's existing stuff better and to run new services.  The new services they allude to are SaaS services.  (Told you this would get interesting).
 
The other thing (and this is a guess), but i'm willing to bet that Live.come is built on CSF/.Net 
 
To my mind this puts .Net up there as a clear contender to other application development platforms like Force.com  . Only better, better for a tonnes of reasons.
  • There's a massive developer community already skilled in building .Net stuff.
  • By openning it up to the world, Microsoft has essentially given its developer partner community an easy leg into the SaaS world. Something they clearly wanted after they announced thier S+S play.
  • Its also given its chances of developing a lot of different applications that appeal to the masses a huge boost. (remember when i talked about Scale and Microsoft ?)
  • Its also given its Telco partners a way of getting access to that same developer community / ISV's. Given they too have scale, know about platforms and are seeing SaaS as a blue ocean, thats incredibly valuable.

 

Watch this space, i think you'll see a whole bunch of SaaS action out of it

How can you create Blue Oceans with SaaS

Blue Oceans

 

There’s been a couple of interesting posts lately on SaaS, how they can bring down their sales and marketing costs (a really interesting take by Sinclair at SaaSblogs) and a taxonomy of what a SaaS companies value (by Ben Kepes) is. 
To me both posts point to a clear need to differentiate yourself, or to use the parlance of Blue Ocean Strategy, play in the blue ocean (underserved by current market offerings) rather than the red ocean (where you compete on price and bleed).

Sinclair and Ben both point to SaaS offerings that are basically doing the same as existing offerings (SaaS/s , ROF or my preferred version SoSaaS according to Phil Wainwright)

The simple fact is that none of these SaaS plays are doing anything new. They should have a large sales and marketing budget, they are undifferentiated and quite frankly are fighting an uphill battle (I suspect on the back of SaaS business model hype).

So what constitutes a good SaaS play in terms of a startup, investment or a good company to join.

Well here are my 3 cents

1)      The service delivered does something that doesn’t already exist (Sinclair’s swarm based marketing in his post is a great example)

2)      Its something you can sell to an individual and have them make the purchasing decision, not a committee

3)      The implementation isn’t disruptive – no data to move around, nothing to install ideally

4)      Not tied to a geography, can be consumed anywhere there is a network. This is often missed by north American companies but boy do kiwi companies get it

5)      It works well with entrenched software investments

6)      Customers can configure it to their needs

I’d be interested if others think there are more. But to me if you pull this off, you are definitely playing in the blue ocean. Then if you are successful you will get copied  and have to do it all over  again.