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Cloud Computing? Legacy SaaS?

In working with startup SaaS vendor Sonian Networks (www.soniannetworks.com) I heard the CEO, George Nichols, use the term "Legacy SaaS" to refer to those OLD SaaS providers who build and operate their SaaS offerings the old fashioned way -- you know, using actual servers and databases and what not.

The comparison between Sonian as a SaaS 2.0 company and existing SaaS 1.0 business is a good one. Sonian has built their entire offering atop the Amazon Cloud. Sonian uses EC2, S3, SDB, SQS and will soon be using the Amazon payment services as well. Here is a company that is literally betting the farm on the use of cloud infrastructure, and far from being on the fringe, this is quickly becoming the norm.

Sonian has been in full production with their offering since January of this year, and is literally the first company out of the chute with an enterprise-level SaaS offering built on the cloud. Sonian provides email archiving and compliance as a service, and because of their solid use of the Amazon cloud, they can literally scale to any number of customers and users without having to worry about having the guys in the data center rack another server, install software, test it, bla bla bla.

This IS the future of software-as-a-service where the computing infrastructure is also provided on-demand. Sonian's cloud-based infrastructure automatically scales up and down based on current load -- so they are never paying for computing infrastructure or storage unless they are actually using it.

Wow.

So the more that I thought about this, the more I realized that George wasn't only right about Sonian being a SaaS 2.0 company, he is also right to use the term "legacy" SaaS to refer to the SaaS 1.0 businesses. SaaS 2.0 business have an enormous competitive cost and scalability advantage over the "legacy SaaS" companies.

This Sonian case also highlights something about some (not all) SaaS 1.0 businesses that we've known for a while - that the operational part of running their SaaS business is left to Managed Hosting providers and isn't really integrated into their software product development team. With cloud computing, the product development team must have a deep understanding of the operational environment. The cloud "layer" logically sits above the operating system, but across the entire cloud computing environment, and therefore the SaaS developers have to have expertise in developing applications for the cloud.

SaaS Developer 2.0?

Published Wednesday, April 23, 2008 11:51 PM by hagins

Comments

 

SJKP said:

So if the world of the developer is moving further and further up the stack (which I completely agree that it is), how important is the partner program offered by the infrastructure provider.

Microsoft have an established and well respected program and yet the new Saas/S+S world is raising lots of questions for the partner team about how the program must change to support the new world.

Google and Amazon on the other hand are relative newbies to this "partner" space.

Will Microsoft be able to leverage the strengths of their "legacy partner program" as they move forward, OR will the "newbies" with no simply change the rules.

In answer to my own question, I believe that the development community MUST understand how their infrastructure partner will work with them, because of the incredible dependancy.  As to whether the experience of Microsoft/IBM etc or the brash, everything new from Google/Amazon etc will win the day - who knows.

May 1, 2008 7:12 AM
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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.

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