Disruption is a funny thing


Its not just the core construct that gets disrupted. If we take SaaS as our example. I’ve blogged before about who else besides SaaS ISV’s will disrupt on-premises ISV’s. But in an interesting way the auxiliary services are also disrupted. I’ll deliberately use this example from IDC because of its relevance and irony. IDC state that integrators are going to be affected by SaaS, that is disrupted.


Here's where the irony kicks in. Ben Kepes blogged about the absurdity of this piece of news by IDC. And what has struck me is that the research houses themselves arc being disrupted.

I remember dealing with IDC here about 2 yrs ago. At that time IDC didn’t even have a taxonomy that included SaaS. They were calling it hosted application management or HAM. If you’ve ever worked with a research house you will know that if something doesn’t fit the taxonomy it creates a major panic. I think that world is gone, I think we are entering an era whereby online citizen journalism is going to usurp research or even the news. The analysis and insights provided by the likes of Bob at Smoothspan , Will Price and all the others out there are providing more timely, more accurate information than these research houses. I personally rely more on the blogging community than the annual, out of date documents put out by these places now. The only thing lacking (and I mean no disrespect) is the credibility that these houses have, it is very hard to know if numbers put up by Bob or Will are accurate. Unless these companies embrace web 2.0 and revise their methodologies they are in for a rough ride in the future. The speed of change is too dramatic, the pulse of the market is out here on the net not in spreadsheet.

 

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SaaS, Opensource and Web 2.0

A fascinating debate is starting to unravel about SaaS and the Opensource movement. (Hat off to Ben Kepes for starting it, as a fellow Kiwi I love seeing this kind of leadership). I really like the analysis and framework used by Sinclair Schuller. I totally agree with his statement that SaaS and Opensource are not mutually exclusive. In fact I think that they are natural bedfellows.

If you buy into Will Price’s analysis, SaaS companies could fundamentally benefit from the support and passion of Opensource development.  If you could reduce the time frame to liquidity from the 1.6x inhouse timeframes by having more developers involved, if you could reduce the amount of capital required by using the Opensource community surely this would be a great thing?

Bob at Smoothspan mentions some questions that would need to be worked out like how do you stop competitors using your code and multi-tenancy / multi version issues.

Bob’s points are valid, but to my mind they represent a dichotomy that exists in the SaaS / web 2.0 world.

“How can operate in a collaborative open world and still make money”

SaaS purports itself to be new world, but it still retains some old world traits.

  • The "secret source is in the code",
  • customer lock in is important",
  • you can’t have unlimited choice.

And frankly all of these are solid business reasons.

But couldn’t it be that the secret source is the customers you have, their satisfaction levels and happiness and willingness to recommend the SaaS to other customers. A critical part of this happiness is them having the ability to take the code and make modifications to it. To my mind one of the benefits of SaaS is ease of customisation.

Not being funny, but if you could get your ERP, CRM or even email customised and running perfectly for your business in a SaaS model using this kind of customisation and the usual plethora of widgets and modules the Opensource community has, why would you want to upgrade? You have the flexibility to change it with your business.

To my mind the key thing for this to happen though is a service delivery platform.

This platform would server as an aggregation point for the Opensource and wider ISV community.

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The benefits of this approach as I see it are:

  • You, as the SaaS company get the speed of development and liquidity benefits mentioned above
  • You, as the SaaS company also get a bunch of smart motivated people who are out there creating the perfect solution for specific verticals (multi-niching), thus making if fit for a much wider group of customers.
  • In some instances this could be the customer submitting their own version of the SaaS application optimised for their business. How powerful would that be? You could even attract SaaS customers into the ecosystem with the promise that if they do submit ‘their version’ they make some money on it.
  • You as the SaaS company get customers promoting the product on your behalf. If you follow the BT Tradespace model to its natural conclusion, you will have people within industry on a forum talking about your product! And this is really powerful as in my experience SMB’s normally don’t know what questions to ask, are under-informed about what the hooks are and completely overwhelmed by the amount of choice available.
  • The other benefits of forums, especially relevant for SMB’s is that they don’t have an IT department, and the way forums run down bugs or ‘how too’ is incredibly important to that segment.
  • If you did the rating thing for modifications or extensions in a Opensource way (check out Joomla.org), it helps when deciding on which  to install.

Force.com (Apex) is close to delivering this type of functionality, the missing bit is the open standards as far as I can tell.

This is all fairly new, I’m sure I’m missing some things out her but I can’t see too much downside

UPDATE: I thought about this more over lunch. If what i say above is true, the downside would be that the current prevailing SaaS model is wrong. The model above is more akin to software virtualisation in its delivery than the one big customised software platform… or am i wrong? 

Everything in moderation

Been a fairly lively debate over the Easter break about offline / online debate, the end of software and all sorts of doom predictions for Microsoft.

 
All relevant points of view, all extremist. Isn’t the answer (like just about everything) somewhere in the middle? AKA both offline and online?  I say this for a number of reasons.

 
Software in the cloud applications aren’t there yet. They aren’t all encompassing. Despite the term rich (internet applications), some of them aren’t all that rich.  They are improving, sure. But they aren’t there yet.

 
Ubiquitous connectivity doesn’t exist, doubt it ever will (see my post on companies making money). This in its own right will stop online only plays dead

 
Prior investments in software mean that if this does happen its not going to be quick. I think this is why Salesforce.com APPEX is such a big deal, it’s a fantastic play to remove the “but we’ve spent millions on SAP already” objection.

 
Fit for purpose isn’t always there. It can be more convenient to have the software on your computer. Reasons like lag, authentication (you actually have single sign on to the desktop in case you hadn’t noticed it) and the way desktop  apps tend to play well together (they’ve got a 15 year head start on online apps)

 
Cultural change. Sure development times are compressing, but software as we know it has been around for 40 years, in the cloud 7ish. Its going to take time to change, and is it a good thing to be always connected? The Net gen might be always on, but they are also the most unhealthy bunch of adolescents ever as well.

 
Companies and individuals will build hybrid solutions for themselves (enter the consultants and systems integrators if they have the foresight). Developers will have to look at the learnings from the mobile application development world to learn how to cater for the instances where you need to have offline functionality.

Will this change? I think so, eventually some companies will rid themselves of installed legacy systems (in like 10 or 20 years).  Cultural change will occur, internet connectivity rates, connectivity speeds, compression and delivery will improve over time.

 
By then though, won’t the computer be obsolete? Typing archaic?

What is the difference between a platform and hosting provider?

An interesting counter question was posed to me by Sinclair on SaasBlogs about the difference between a hosting 2.0 provider and a platform provider. Certainly got me thinking, on a number of fronts

  1. Why is the term hosting 2.0 negative? I’m not challenging Sinclair on that interpretation, that was my intent when in my first response. It’s just that the web.20 is positive and exciting. Enterprise 2.0 was too (for a while). Why not hosting? Isn’t a platform a logical evolution of hosting? It’s (potentially)  disruptive and it uses many of the same thought patterns around facilitation and user based configuration?
  2. What IS the difference between a platform and a hosting 2.0 provider? In the link above I think its intent. But it’s more than that too. Platform providers have something more valuable than hosting providers. Hosting providers (as good as they may be) are quite literally 1.0. They may have made incremental enhancements but it’s built to service an older world. Where’s collaborative dynamic interaction? Whereas a Platform provider (if they’re worth their salt) has coalesced a bunch learning’s to deliver something better. I posted some time ago about the potential benefits of collaboration on development. A platform is the epitome of this. They’ve done the hard yards, been through the pitfalls and have come out the other side with the (astute) realisation that they now have something infinitely more valuable than an optimised hosting solution, they have knowledge and experience. (By the way, its astute because they commercialised it)
  3. Platforms also come with a bunch more functionality. The multi-tenant nirvana that many service providers have been trying to develop in a box. With all of the plugs, webservices and Service levels expected. Nice work.
  4.  
    Platforms ARE there to facilitate. When you put you app in a platform if forms part of the solution. The collective outcome is something entirely different from hosting. Hosting is static, siloed, old school.

 
Again, i’m guessing but it’s an interesting (potentially semantic) discussion that could be applied to a much wider context (like the whole 2.0 movement)

 

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Paradigm Shifts

After reading this post  by Eric Norlan about how some of the leading web 2.0 exponents are only now considering identity federation I was struck by the notion that, turely to get widespread adoption of web 2.0, its going to take a massive paradigm shift. It highlights to me that even those who portain to live and breath the web 2.0 culture sometimes miss the point.

    Posted by Paul  

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SOA within the enterprise

I haven’t quite got my head around this all because to me the crux of this issue is the convergence of 3 or more major technology trends.  But the thing that strikes me the most about post like this one from Joe McKendrick is the paradoxical nature of what’s going on.

        Posted by Paul

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