Posted by Bob Warfield on June 15, 2007
Phil Wainewright is blogging again about the impact of SaaS on the partner world, in this case SI’s. I’ve written about this subject before in my article “Is SaaS Toxic for Partners”. Basically, he is writing about the experiences of some SI’s who’ve taken the SaaS bull by the horns and tried to differentiate themselves as SaaS specialists. The firms in question are Appirio and Bluewolf.
It’s an interesting strategy on the part of those firms, and a good one at this early adopter stage. While their competition is imitating a deer in the SaaS headlights, they’re getting a head start in the brave new world.
Unfortunately, their comments on what they’re able to do to differentiate themselves in the SaaS World don’t change my opinion that in the long run, SaaS is toxic to partners. Some of the differences they note SaaS brings about:
- Much shorter implementation cycles. We’re talking 30-60 days instead of a year of consulting.
- Because cycles are so short, users want iterative agile development engagements that are much more collaborative than they had been in the past.
- Because there is so much less to do, the personnel at the SI are involved in many more projects—5 at a time instead of 1 at a time.
- There is much less requirement for the arms and legs: the actual hardware, database, and app server expertise.
Those all sound like fundamentally bad things for the SI’s business, because they mean there are a lot fewer services to be sold on a SaaS project. As the service dollars to license dollars ratio falls from 12:1 in perpetual markets to 4:1 in SaaS markets, there will be a glut of SI capacity. Further, the ease of system integration for SaaS solutions will tend to commoditize what little business is left making matters even worse. As Narinder Singh, co-founder of Appirio puts it, “The whole ecosystem will get disrupted.”
The one ray of hope being sounded is that there is an enhanced opportunity to create IP in the SaaS world. This is true because customers are interested in Best Practices, and because it is so easy to implement a solution the vendors are finding the implementations are more reusable.
Creating distinctive IP will be the defining difference for the partner ecosystem. Those partners that can create IP and leverage it will be much more successful than the others who are likely to be commoditized out of existence.
The corollary to this is those SaaS companies who facilitate their partners creating valuable IT will find a much more supportive partner ecosystem building up around their solution.
Posted in Partnering, saas | Leave a Comment »
Posted by Bob Warfield on June 6, 2007
Tim O’Reilly picked up on an exchange about programming for multi-core computers between Andrew Donoho and Adam Beberg. The gist is that Donoho believes there is a major speed bump in the near future when the next increment in performance from computers will require massively parallel programming while Beberg (of http://folding.stanford.edu/, a massively parallel research project that uses computers on the internet to simulate a supercomputer) says the days have come and gone and the problems are already well understood.
It’s interesting to contemplate this discussion in the context of Enterprise software. At my previous employer, Callidus Software, we solved huge scalability problems by means of grid computing, which is essentially the technology used by Folding@Home, albeit we didn’t try to spread computers all over the Internet! In essence, we were able to harness large numbers of commodity computers running a common Java application to simulate a huge mainframe class computer. In some cases we ran a hundred or more cpu’s. The advantages to the customer were several.
First, we were able to solve their problem, which involved computing sales compensation for some of the largest sales forces in the world; companies like Allstate, United Health Group, Sprint Nextel, and the like. These are customers that had up to several hundred thousand payees and many millions of transactions that had to be analyzed and a commission calculated through some extremely complex business logic that changed from customer to customer. Our system made it simple because our product, TrueComp, had a rules language that let the customer create their own business logic in a language similar to Excel formulas.
Second, the grid system turned out to be extremely valuable for the operational flexibility it gave IT departments. We had one customer that started out with a 32 cpu Solaris SPARC cluster, added 40 cpus of Wintel blade servers to that, and then followed on with a 24 cpu IBM AIX cluster. From the perspective of our software, these were all the same computer even though we had 3 radically different hardware and operating system architectures! Thank you Java, portability is thy middle name.
What does all this have to do with Tim O’Reilly’s blog post? Just that software companies need to consider how to help their users take advantage of cheap computing resources that may not even be from the same architecture family. This means first having an internal architecture that can take advantage of such resources, and second having user friendly tools to help your customers take advantage. In this case, Callidus had a rules language that hid the fact the customer was dealing with so many cpu’s entirely.
Some of this is available almost for free. Web servers scale pretty well in this fashion, and products like Oracle’s database are now being offered with grid computing. Where I think the original article is right on the mark is there are precious few Enterprise Business Logic layers that are built around these architectural ideas, and I think the
Enterprise thinkers out there are going to have to work on this.
Enterprise players that don’t find ways of embracing grid architectures will find themselves increasingly at a disadvantage relative to competitors who have because their systems won’t scale as cheaply. Hardware is a big piece of the overall cost of the solution, so this can quickly become a fatal flaw. This certainly worked to Callidus’ advantage and is one of the reasons they became the market leaders in their space.
One thing I will say is that helping with this problem will be an integral part of anything SmoothSpan produces.
Posted in grid, multicore, saas, software development | 3 Comments »