Focus on competitiveness with SaaS, not security perils

By Nick Hortovanyi

Some are expressing concerns about the security risks and perils related to compliance, availability and data integrity of using cloud based SaaS services. James Governor, summed it up nicely here, when promoting CloudCamp London by referring also in the title to Avoiding Monsters. 

I'd argue that the services that will be first consumed through a SaaS mechanism will be transactions that do not offer a competitive advantage to that particular business. That is it just enables them to work more efficiently.

If so, what benefit will other organisations, or individuals, have with accessing information regarding these non competitive transactions?

Even if they did have a glimpse, that picture portrayed by that glimpse is only representative of that point in time and will quickly change to another picture.

What may be deemed competitive information, in this case, is the aggregate information of these transactions containing a dimension of time. Therefore with careful partitioning any potential security risks can be mitigated.

So avoid the FUD, as James said "Dangers and Perils - Here Be Dragons. Ah yes the beauty of FUD."

SaaS - those that get it and those that don't

By Nick Hortovanyi

Two camps are evolving in the software world. Those that see SaaS (Software as a Service) as the future of software delivery to end users and those that don't.

Entrepreneurs and innovators see that providing access to their software over the internet through a hosting provider as the main viable method of delivery to consumers. Establishing traditional channels via distributors and resellers is too cost prohibitive, as well as potentially a prohibitive barrier to entry. This is the great disinter-mediation that is happening with software.

It is also some what silent from the perspective of people working inside of larger corporates and government organisations.

At this time, the majority of IT executives perceive that their organisations will continue to install software on-premise and support it. For the majority of IT consulting organisations this is still a lucrative business to persue. There is services revenue for customisation, training, installation & support as well as from the initial product sale, and with some vendors from support renewals.

So what you can see is a conflict developing here. There are groups of people that want to make the SaaS model work to break down the barriers and obstacles that are stopping them from selling their products. On the other side, there are also groups of people that want to preserve the current status quo with on-premise software installations.

If they do get it, they can see the world of hurt that is coming.

Software multitenancy drives operational efficiency

By Nick Hortovanyi

Over the last week, I've been evolving a presentation regarding our multitenancy commercialisation efforts through Business Portal Server. For the most part it has been received positively.

In one session that I gave though, a VC (Venture Capitalist) who was participating in the group, stated that we gave an excellent presentation but our business model was flawed. I of course disagreed prefusely. The argument presented was the classic of the internet as a disintermediation agent between organisations who provide SaaS services and the consumers there of. However, the model I see, is that new channels will evolve through eco systems of organisations working together. These organisations will focus in their particular areas of expertise be it software application focused or technical infrastructure to form stronger composite services.

The larger organisations that I deal with for on-premise consulting are continuously trying to reduce the number of vendors that they interact with. The lower the number, the less points of interactions. The argument being here the more efficient the internal procurement process. I believe also, that there is limits to the number of meaningful relationships that can be maintained to add value.

The complexity of development and support of production SaaS infrastructure is growing rapidly in complexity. Its only natural for consolidation and specialisation to follow. How these organisations work together will form the new software channels. It will also be shaped, rightly or wrongly, by procurement processes which drive how organisations purchase.

Will Microsoft be relevant in the SaaS world?

By Nick Hortovanyi

As some reading this might know I'm a bit tired of Microsoft everywhere, so I apologize in advance if you perceive some negative sentiment towards Microsoft. I have been like that since 2001/2002, when .NET was announced/released and everyone came knocking on my door - you have to look at this. I'd turn around and say Why? its an earlier version of what I'm working on with J2EE. I'd already worked out how to use EJBs and related technology properly by that time and how to specify J2EE projects for delivery (hard, hard work getting to that point though) using geographically distributed development teams.

I suppose .NET woke some of the J2EE guys up by having the Microsoft People say "Don't rule us out, .NET can do it too!" but at the same token the Microsoft aligned developer community needed something to move to. As VB, ASP and MS C++ development was no longer exciting at that time or able to scale. Now did you notice that I said "Microsoft People"? What surprised me, was that there was an option for these Microsoft People to explore alternate technology besides the newly introduced .NET. After all, who uses version 1.0 software? I wonder how many explored alternate technology only to say that .NET Ver 1.0 was the way to go as it protected our investment in VB and ASP skills? Many did just this, they kept to the Microsoft technology, even though there were maybe better alternatives for their circumstances, thus I call them Microsoft People.

SaaS (Software as a Service) is the future of software delivery, being that it will be off-premise delivery of software as a service to the consumers of the products. There is lots of interest in this subject and the analysts are always commenting about strategies that organisations will adopt to transform over time to the SaaS delivery model. For Microsoft, there will be a loss of income as the number of licenses installed on-premise will dissipate as these off-premise services become more pervasive. SaaS will also be extremely disruptive on the IT services community that is supported by these Microsoft People. I can see many Microsoft People becoming disgruntled, especially in the Microsoft software channel as the need for the software channel dissipates through the direct to consumer engagement model of SaaS.

Microsoft is a company that has grown up with packaged software on-premise and its technology has grown to support that model. Because the technology was for on-premise and used extensively in lower concurrent user usage scenarios, emphasis was not placed on those items for higher concurrent usage and availability scenarios like in-process fail over. I'm still not certain if .NET can support this or not? Now this is where the J2EE technology shone in so many ways above that of .NET. 

I think there is some very turbulent times ahead for Microsoft and the recent Yahoo take over activity shows that they are looking for more ways to accelerate this change then what can be achieved through internal change and innovation alone. As they say, a large ship can not easily be turned by a small rudder.

Now I grew up in my early teens programming Microsoft Level II Basic (this is giving away my age), and entered the work force as the PC was becoming ubiquitous in business operations. So much so, that I avoided learning how to program the Mainframe. I bought a copy of MS-Access Ver 1.0 at a discount. I used to program using early versions of Microsoft Studio for C etc but during that time and up to now, I have never seen Microsoft have it's "IBM Moment".

Is the Yahoo takeover activity an early signal or is it the continuing emergence of SaaS as a disruptive influence potentially signaling Microsoft's "IBM Moment"? I'm not a 100% certain, what I believe though is that there may be too much inertia with Microsoft's current business model to enable it to change rapidly enough to be relevant in the SaaS world of tomorrow.

Customization - friend or foe of SaaS?

By Nick Hortovanyi

I was pointed to a Phil Wainewright blog entry on Customization: curse or blessing? by Denis Howlett from a twitter conversation a few days ago.  In the twitter conversation, I'd been questioning the scalability of Microsoft Sharepoint, and it appeared that the way to scale Microsoft Sharepoint was to look to remove as much complexity at the app tier as possible (would assume this means custom applications) and use reverse proxies (eg cache as much as possible).

I'd already read Phil's blog entry. But after the conversation with Denis, I reread the entry in detail. The following paragraph got my attention "As computing shifts to the cloud, the way in which vendors enable customization may become the key determinant of success or failure. It all revolves around what kind of platform for customization the market really wants."

To me this is a key statement, because customization of work processes, through custom code, in my mind no longer offers a sustainable competitive advantage to most businesses. My guess (if someone has some solid statistics please leave a comment), is that the majority of IT budgets (70% to 80%) is spent in support of software, that has been extensively customised on-premise, for that business and is now considered somewhat legacy.

Are workflow tools or platform APIs the key for customization? Partially, but having the right type of applications/components and means of personalizing (a form of customization) those applications for the given users is as well. Allowing the applications to communicate through a composite interface will also add value to those looking to tailor the applications for their use cases.

I do agree with the statement commented, by Phil, from Nelson "There's a world of hurt coming to the IT services industry based on the SaaS model". Current IT Service companies make revenue through customising software on-premise. So as the SaaS market matures, they will fight the move of existing customisation software off-premise to equivalent capability in SaaS providers, marketplaces and aggregation points.

Thus customization is a friend of SaaS, as it is currently very costly on-premise; but the degree of customization, afforded to each user community, is a foe of SaaS because of the performance impact as concurrent usage scales.