Courtesy Wikipedia
Ready for some succulent software-as-service news? Then come with us to check out the SAAS Summit 2009, going on right now out in San Francisco. If this event is any indication, the notion of selling software as a service has — how shall we say? — a new poignancy in this, the age of the digital downturn.
The notion of offering software products via the Web has a certain let's-get-goofy edge to it. Moniker creep already is a problem. SaaS is also known as grid computing, cloud computing, virtual computing. Hmmmm. For sure, in this no-go economy, software via the Web has fresh street cred. Web-based software is cheaper, at least initially. Paying for software by the month can get expensive fast -- all those fees add up -- but consumers and small businesses seem to be loving the idea of holding onto the old XP machines, or getting a NetBook, and running Google Apps, ZoHo or any one of a number of free or low-cost software solutions. In short, these apps are hot. Rumors earlier this year were that total paid users on Google Apps run 800,000 and unpaid users — including us here at Blumsday — probably are in the millions.
What is interesting is just how extreme the downside is for SAAS. Already, some strange bedfellows are turning up: Sure-to-be cloud computing road kill, Microsoft, has stepped up to be the big Diamond Sponsor of the event. Which is flat-out hilarious, considering that Microsoft does not really have any cloud computing products per se — one of the few it did have, Equipt, just got canceled. So Redmond positioning itself as a cloud player indicates it's comin' for this market.
That's some real segment-shaking stuff.
Considering how slash-and-burn Microsoft can be about getting its product in the market -- we all love to bash Vista, but don't forget the XBox is a major gamer -- existing companies will face new pressure.
Already, the signs of a bubble are here. It is getting hard to figure out exactly what all these cloud computing companies do. Cast Iron Systems, Web Spiders, and 3-Par look cool, but what do they do? And big players are following in their steps for techno double speak: IBM has cloud computing page. So what?
Now we are not saying computing in the cloud is done. But there are issues with this stuff that are not getting mended. Google had a major outtage earlier in March. There are faaaar too many players in the space already. Just take a look at this list of online word processors. Do we really need that many?
Look over these panel speakers. Do any of them really have an answer as to where this space goes?
We wonder.
Comments
You raise a good point in that all the 'hype' around SaaS is sometimes just that and hardly helpful to anyone. Everyone always wants a piece of the next big thing - even Microsoft wants into the game even though this paradigm shift will shake the firm to its core. They are a bit more engaged in SaaS than you mention. Their CRM product has been available via the SaaS model for some time. I believe they also offer their email and portal products as SaaS. Their Azure platform will certainly at least make them a contender, but the firm's best days are behind it. Consumers have seen an explosion of innovation on the web while business software has been more or less stagnate. How would consumer services via the web be different if individuals had to install hardware and software in their home for each web site they wanted to use? That is basically what companies have to today to use their applications and that is why business software innovation (& more importantly deployment) has lingered behind its consumer facing counterpart. SaaS and PaaS are more than marketing slogans - they promise to free the vast services (& the creation of those services)technology can deliver from the extremely limiting software and hardware infrastructure. Under served markets will benefit most, especially small and medium business who have never had access to state-of-the-art technology services until now. They will adopt quickly.
As you rightly say, Software as a Service is not new. It's essentially the same as Thin clients and Application Service Providers that have been knocking around for years now.
What all this hype passes by is where is the benefit to the business? And there's no one size fits all answer. It can work for some applications, and not for others.
We've worked with a bunch of clients now to help them think through if this really is a good thing in business terms. Our experience may be helpful to others. Check out www.procertis.com.
Thanks for your update and views - very interesting.
Mike McCormac
www.procertis.com
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