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SaaS is Unavoidable

SaaS is not a technology fad, or even a technology-driven development. SaaS is an economic evolution towards a model that is simply more efficient, more convenient, and gives customers a way to keep up with the increasing rate of change.

SaaS has no borders. Barriers such as language and currency are not that difficult to knock down. SaaS providers can be anywhere on the planet.

SaaS is being driven by the ever increasing penetration of broadband services into both homes and business. Consumers and business owners are increasingly turning to the Internet as the place to find solutions to problems – and SaaS providers will be there to provide the answer.

SaaS is an economic evolution that fundamentally reduces economic friction in the entire value chain for software, and as the rate of technological change continues to increase – it is literally the only model for software delivery that will be able to keep up with the increasing rate of change.

Ultimately, SaaS and the Internet are economic accelerators. With SaaS, new software companies will be created, go-to-market, and know their fate quickly – SaaS accelerates the outcome.

Published Friday, August 25, 2006 3:17 PM by hagins
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Comments

 

abrooks said:

So I think there is an interesting trickle-down effect of SaaS on the underlying platform.  One of the benefits of SaaS is that beyond some basic Browser compatibility, you can build on one platform of your choice and optimize to it, whether that's Linux, Unix, Windows, AppExchange, something from Google, etc.  So you don't waste dollars on cross-platform compatibility such that people can run the server-side portion of your app on 20 different Operating Systems.  You also get rid of backwards compatibility issues.  So one would think that the platform that optimizes itself for SaaS delivery would become the defacto back-end for hosted applications.  I wonder what that platform would be, and how are the platform providers 'positioning' themselves versus the application providers that are creating platforms (like Salesforce).

August 26, 2006 5:04 PM
 

jmurfin said:

Building on Andrew's comments, I think another benefit of SaaS is the ability to open your platform or data to either trusted third parties or consumers/customers themselves. Technically, this is the realm of "APIs" - Commercially, it's a way of leveraging openly available data or internet services to extend your own offerings? A simple usage scenario is integrating mapping services into your web site (such as Google Maps or Microsoft's Virtual Earth) or photo and video services from YouTube or Flickr. Another example is RSS, or blog feeds, which are by nature 'open' - just click on "SaaS News" above and you'll see an example of aggregating a number of RSS feeds to provide content specific to the SaaS Camp. Salesforce's AppExchange seems to be an early winner in providing hooks into their platform to dramatically increase value to their customers with little of their own resources being used to create it.

August 27, 2006 11:44 AM
 

atomlinson said:

Jeff related to this issue I'm curious about your take on the customization issue with SaaS. This certainly appears to be the main stumbling block to wider acceptance and adoption (at least in terms of perception), and certainly there are strategies and approaches developing in the SaaS marketplace to allow some level of customization, if even in the form of simple scripting, on the customer's end. How do you see this playing out in future as SaaS continues to advance in the marketplace and application/service providers become more sophisticated in product development?

August 27, 2006 4:43 PM
 

hagins said:

With regard to Andrew's comment above about the environment-centric nature of SaaS (e.g. you get to pick a single platform and stick to it), the issue today is that there is no clear platform that provides advantages over others relative to delivery of SaaS. Whether you are on .NET, J2EE, or PHP, the benefit is in picking a single platform and not worrying about the dizzying prospect of making your software product run on a wider array of operating systems, databases, application servers, etc. The are problems faced by traditional ISVs, and one of the reasons why SaaS providers have a significant advantage over the traditional ISV trying to morph themselves into a SaaS provider.

August 30, 2006 5:44 PM
 

hagins said:

Customization is the SaaS world is certainly an issue when trying to move up-market into bigger companies that want to customize the service to meet their specific business needs. SalesForce allows a certain level of customization of their data model to meet business-specific requirements, and you can integrate external systems using their APIs (web services), but you can really customize the business logic that runs within the SalesForce.com service. And SalesForce is probably doing better on the mass customization front than most others. So the bottom line here is that the SaaS industry definitely has some things to figure out. The good news is that this is NOT a technology barrier. Nothing, for example, is stopping SalesForce from allowing customer's to configure specific "hooks" or places in SalesForce where it would call OUT to a customer-provided web-service that customized business logic. Service-Oriented Architectures and composite services that "live in the cloud" can provide an answer here, ultimately.

August 30, 2006 5:53 PM
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About hagins

Jeff Hagins has more than 24 years of experience in product marketing, product management, software development, technical operations, service delivery, and software quality. Hagins is currently the Managing Partner for Mural Consulting and a General Partner of Mural Ventures, both companies that focus exclusively on Software-as-a-Service. His career has also included positions as Chief Technology Officer, Senior Vice President of Product Management, Chief Architect, Vice President of Engineering, and Board Member for companies such as Lockheed Martin, J.D. Edwards, TeleComputing, Apptix, Dynix, and SMBLive. Hagins has been active in the Software-as-a-Service industry from the beginning, helping to launch the J.D. Edwards ASP initiative in early 2000, becoming a board member of the ASP Industry Consortium (ASPIC) in 2001, as an advisor to the Computing Technology Industry Association (COMPTIA) Software Services Group, and as an advisor to Microsoft on the Communications & Collaboration Developer Advisory Council. Hagins is currently also a member of the Gerson-Lehrman Technology, Media, and Telecommunications Council of Advisors. Hagins has worked actively over the last 6 years in the Utility Computing and Software-As-A-Service industry with companies such as Microsoft, British Telecom, CSC, Telecom New Zealand, Cable & Wireless, NTT, MCI, Bell Canada, Savvis, and many others. His efforts with these ISVs and Service Providers have focused on overall Go-To-Market Strategy and Execution, Product & Marketing Strategy, Channel Development, Service Design & Architecture, Service Optimization, and OSS/BSS Integration. Hagins' experience in the SaaS industry is unique, having worked as CTO for SaaS ISVs such as SMBLive, as a CTO for pure-play Application Hosters such as Apptix, and even as the CIO for a mid-market company purchasing SaaS offerings (Dynix). He brings a unique perspective on the complete value-chain for SaaS, and in his role as Managing Partner for Mural Consulting is actively working with ISVs and Service Providers of all shapes and sizes to help them define and execute their SaaS strategies.