Amy Wohl's Opinions on SaaS

In Praise of Google's Office Plans

David Berlind has written two great articles on just what Google is really up to.  You'll want to read them both. The first article is a very detailed tale about how a business user of Google can set up the equivalent of a very fine, easy-to-use and very cheap collaboration space.  Set aside 20 or 30 minutes for this one -- it's definitely worth it -- not just for the details of what's there, but for Berlind's assessment of what Google could do with it.

The second article is his thinking about what Google thinks it might need to do to have a fully fledged competitive offering, keeping in mind that they're not trying to compete with Microsoft Office 2007 and SharePoint, etc., etc. but rather with a notion of what users are doing in a new, on-line, web-based context, with much lighter-weight, but much more collaborative tools.

Since I'm working on a White Paper on just that subject, I read every word of both articles very carefully.  I agree with much of what Berlind says, although second guessing Google based on what they've done so far isn't always easy.

I'll be writing a lot more about Office 2.0, an attempt to consider all the office tools, from traditional desktop suites to the lightest web applications, and where and how they might fit together.  I'll be posting a description and outline of the White Paper on line shortly, in case you'd like to know more about it.

Join me at SaaScon

I'm going to be speaking at the SaaScon Conference in Santa Clara, April 17-18 (I'm a program advisor) and the program looks great. 

If you read this blog and you'd like to join me, you can take $100 off your registration fee by going to www.saascon.com/register  to register and using the following code:  AWDEAL47.

I'd love to see you there.

Amy Wohl

The Best Test of SaaS is Using It

For some time now I've been following the adventures of Xeequa, a new On-Demand CRM company, which reported its start-up activities in its CEO's blog.

He's on his way to speaking at a SaaS conference and he's published a longish report in that blog on how they run their own company almost -- but not entirely -- on SaaS.

He gives you a fairly complete explaination of what they picked and why.  Some of hie choices wouldn't work for a larger company (Quicken Online for ERP???) but it allowed them to come up fast and with a minimum of fuss and, of course, that's the point.

He already  notes some actual or potential correction points where if you change your mind you can just take your data elsewhere. 

They also back up and host everything on line.  Xeequa points outs that this may be safer than doing it internally since most data fraud problems are internally generated.  An interesting thought.

I'm not suggesting too many existing companies will rush right out and do the same.  We drag our legacies with us.  But we will consider SaaS appkications frequently for new applications and remote users -- and as replacements for existing applications that have become expensive but contribute nothing to the goals of the company that can't be achieved more easily and inexpensively via SaaS.

New companies like Xeequa -- and not just high tech start-ups -- will increasingly consider using as many SaaS applications as they can, cutting their IT costs -- or as Xeequa likes to say -- their Information Management costs -- to the bone.

A Note on Windows Live

These days its hard to decide where to post what, so you might like to look at my brief post on Windows Live and its reference to ZDNet's slide show on the subject.  Just click over to my other blog at http://amywohl.weblogger.com/ and read about it.

Corel Throws WordPerfect's Hat in the Ring

The office software market is heating up so fast that someone is surely going to get burned.  Corel, the company that provided safekeeping for WordPerfect (once the Number One word processing program in the marketplace, prior to the advent of Windows 3.0), wants to make sure it isn't their product, which sells a steady-- if distant -- number two, behind Microsoft. 

Wednesday, they announced a beta of a free, lightweight, collaborative word processor, downloadable from their web site.

WordPerfect Lightning is just that.  A fast 20 Mb downloadable piece of code which is easy enough to use that I figured it out in about 5 minutes.  It lets you jot down notes, assemble information from a variety of sources (such as your documents in Word, WordPerfect, pdf files, etc.), web pages, and images) and then make them into simple documents.  You can also share them by publishing them to a shared document space.  (The collaboration software is courotesy of a new WordPerfect partnership with Joyent)  Lightning gives you 200Mb of storage and two eMail addresses.  You may add more space and more users to share your thoughts at a small fee. 

WordPerfect hopes that some portion of Lightning users will choose to upgrade (by clicking a button and indicating how they'll pay) to the full WordPerfect Office Suite.  It's completely compatible, of course.  WordPerfect permits the complex formatting that Lightning doesn't do.  It also provides the spreadsheet and presentation software not available iin Lightning.  We asked WordPerfect's Richard Carriere whether that might be coming, but he was mysterious in his answer.  I guess he'll add more function only if the competitive nature of the market demands it.

(But, interestinglly, Lightning will do tables and numbered or bulleted lists, which might be enough for some folks.)

We'd rate Lightning high for its ease of use and selection of features.  We particularly liked the idea ofo supporting document assembly (isn't that how we all write nowadays?) and document sharing.

Please let us know what you think if you download it.

Will Google's Entry to Paid Software Change the Market?

I've got a dozen things I'd like to blog about, but they'll all have to wait because today Google finally announced (it had been rumored for weeks) that it was going into the corporate application software business with paid subscriptions version of its application suite.  Google Apps Premier Edition. 

Designed for business users of any size, from a single user to a company of thousands, Google expects many of these users to come from the SMB market, the "white space" where users have been underserved, required to invest in not just expensive desktop software, but also the hardware and infrastructure and the human resources to make it work.  But SaaS offerings attract whoever likes them and Premier Edition is already attracting a number ofo enterprise-size customers, less as a replaclement for their traditional Office solutions and more as a complement, serving a larger number of users.

Google hasn't changed the offering itself (yet!), it's the same portfolio os lightweight desktop apps for word processing,  spreadsheet, and document management, as well as email and calendaring, that were already offered for free.  An important part of the Google value proposition is that not only are the apps available anywhere with browser access, they offer collaborative features, permitting sharing among users, including users across companies or supply chains that can't easily access applications within a single company's firewall. 

Google has also added some new features to the subscription service, such as much more email storage (10 Mb instead of 2Mb per user) plus a 99.9% availability of service guarantee and 24/7 technical support.  All that for $50 per user per year is a pretty good deal.  Google Premier users will also be able to access their email accounts via Blackberry devices.

A Different Approach to Office Work

It's impiortant to think of this less as a competitor to Microsoft's Office Suite (or, for that matter, to new versions of Lotus Notes with their embedded lightweight editors), and more appropriately as a different approach to office worker support.  Consider this:

• The Google approach is entirely Internet-based and always was.  This means there's no need to try to incorporate previous non-Internet software approaches or to protect existing business models.  Google simply is a net-native, fully Internet-exploiting model. 
• Google isn't trying to replicate Microsoft's office software portfolio.  Their desktop applications (word processing and spreadsheets, for example) are lightweight, simpler versions which don't attempt to match the deep functionality of more mature products. 
• On the other hand, as Rajen Sheth, the Product Manager for Google Apps Premier Edition, stated, the Google portfolio will grow over time in both the functionality of individiual applications and the number of applications in the portfolio.  However, they are likely to continue to emphasize ease of use and collaboration and they may go in application directions that are quite different than those chosen by traditional office suite vendors.

Rajen went on to remark that with over half the workers in the US without email addresses, Google clearly clearly has lots of market opportunity.  He doesn't believe that the market for Google will be limited to small businesses and, in fact, several quite large companies are already testing the Premium Edition (Procter & Gamble and GE have been mentioned in every story). 

There are already over 100,000 users of the free version of Google Apps (plus a large community of university users).  Google has no intention of discontinuing of limiting this version.  Premier will be differentiated by extra features and technical support.   Microsoft has about 250,000 users of its Office Live service, an on-line service for the small business market, designed to be used with Office on the desktop (Microsoft calls this an "attached service" model).  We'd guess that with its installed base of free users at about the 150,000 mark, Google will have more than 250,000 users by the end of the day tomorrow! 

Realistically, Google is likely to attract a large audience for its paid product.  The product is so simple to try out -- a company can enroll any number of users and immediately begin using the service with no internal support.  In fact, we'd guess that there will be some self-selection in the beginning, with some users simply trying out the service on their own or in small groups and then going to the company to sell their success as a reason for expansion.  In other cases, we suspect companies will use Google's new paid service for groups of users it cannot well serve with its current strategies, such as remote users (whether they are individuals such as salesmen or remote locations), teams which include non-employees, and ad hoc activities where it wouldn't be practical to set up a group of users quickly.

Look at it this way;  We are at some kind of crossroads, albeit one with very fuzzy edges.  In the past is the old kind of PC desktop productivity applications and the old kind of office automation or groupware which required significant resources for impolementation and management.  In the future llies the idea of a vast variety of user-oriented services, situated in the Internet cloud, and easily selected and "implemented" (selection is almost the whole task) by the users themselves.  We are somewhere in the middle.  Exacty which approach will succeed -- all Internet, a hybrid, the traditional model, or someothing as yet undiscovered is not yet known. 

We're sufficiently intrigued that we're doing a bit of research around this topic (some things, like your roots, you can never quite get away from) and we'll tell you about what we discover as we continue down that path,

 

A SaaS Solution to a Cyclical Clash

I read Peter Coffee's column on what might happen if the Microsoft CES anouncement to put computer systems in Ford cars comes to pass with some interest.  He notes that we buy cars on increasingly lengthy cycles -- I tend to keep mine for 10 years or so unless something intervenes like an accident or a very expensive repair in an aging vehicle.  But we tend to trade in our computers a lot more often.

Car manufacturers have looked longingly at consumer products like cell phones which tend to get traded in every 18 months.  They're not likely to get  multiple like that, but they'd settle for the somewhat faster cycle of PC's.

But what if we say, "No." and refuse to change our car buying habits.  After all, as Peter points out cars are safer and relatively cheaper these days.  We don't have any reason to trade them in every three or four years.

He suggests we could have a standard piece of hardware for cars, to make it easy to upgrade by swapping up and out.  He also points out that consumer grade products are not nearly so robust or secure as enterprise ones.

We can, of course, solve all these problems at once. by having only the interfaces to information in our portable devices (including cars), plus some storage to permit off-line usage, and let bullet-proof infrastructure providers, Software as a Service that is, offer the rest.  That way, we won't have the upgrade our car electronics nearly as often (modern browsers run even on quite old computers, you may notice) and we can still have very high levels of security and data integrity.

It reminds me of aonother cyclical clash I wrote about over 20 years ago.  Do you remember the battle of the titans when AT&T bought NCR and IBM retaliated by buying its own telco, Rolm.  (circa 1990-91).   I remember noting that the problem would be there was no common decision maker - computers were bought in the IT department and telephony equipment by a totally different (and generally less prestigious) group.  Also, mainframes were bought on seven year cycles, minis on five and PC's on three, but telephony systems were bought only when a new company was formed, a company moved to a new location, or when the company had to either buy a new system or cease to operate -- typically every 15 to 20 years.  The chance of those cycles coinciding and allowing the decisions to be coordinated (to take advantage of a computer-telephony company) was pretty slim.

I have a feeling that the chance of youir need for a car and your need for a new wireless, handheld coinciding is going to be pretty slim, too.  A car synching station which sends the data back and forth to an SaaS operators' data cloud?  That I can easily understand.

Changing to a Services-Based World

I've been busily working on a number of SaaS-related things in the last month:

• Judgkng a small portion of the many SaaS Solutions submitted to SIIA's software contest this year.
• Working on the next SaaScon conference (April 17-18 in Santa Clara, CA), as a member of the advisory committee. 
• Just working -- consuming and creating information -- which means using all kinds of web-based services, all of them software-based.

As I did that I came to several conclusions:

1. It's getting hard to tell that the service you're using is software.  Most people just use the service without every thinking about that.  This was clearly true for some of the contestants I was judging in the SIIA beauty contest and it's certainly true for most of the web-based services I consume (access to two bank accounts and all my credit cards, on-line shopping -- I bought most of my xmas presents on-line this year, billilng customers (many of whom use on-line purchasing systems now), ordering movies (NetFlix), and so on.  I also buy travel (hotels and air and limo reservations), send cards and gifts, buy postage, order personalized forms and stationery and on and on. 
2. It's getting hard to separate a service from its underlying software and, in many cases, the service user doesn't care.  Most would actually prefer to use the service without thinking about or "seeing" the software -- they just want to see the service and the desired result.
3. Many of the vendors who demoed their software services for me were puzzled when I called this to their attention.  They think of what they're providing as a service.  Of course, it runs on software, but they think of that as part of the plumbing.  And therein lies the tale.

So it was with great pleasure that I read Phil Wainwright's article on how Software as a Service is becoming more of a Service -- and how service providers are buying SaaS vendors to automate their offerings while at the same time smart SaaS vendors are bundling other services with their offerings.  You'll want to read his whole article.

Phil speaks at some length about the notion that the market might eventually coalesce around one (or more) platform providers or service aggregators.  I have another idea to add to the mix.  I think that for many users access to this new world of services may come through an existing relationship with a trusted service provider from the physical world -- their telco, bank, or bank card company (the source of their Visa or Mastercard).  If these compoanies become service aggregators (or, if they make aggregations of services, collected and hosted by others, available to their customers), they may convince a much larger and more mainstream market to try on-line services as a way of life.

I have little doubt that this change in how we deliver function is coming -- I think the unanswered question is not "Will this happen?" but rather from whom will customers buy their services.

Defining SaaS

Phil Wainwright has written a definitive article on what SaaS is and why it's a very broad set of services, not all equivalent in architecture, concept or value.

It was particularly timely for me because I've been spending the last week working on judging SaaS players for the Codie contest.  There's no better way to see how many different kinds of approaches fit inside the SaaS tent then looking at a dozen on-line services and asking questions.

This afternoon, one vendor felt that he owed me an explanation as to why his very definitely SaaS application did not use a browser interface, but rather a rich client.  (They have a browser version.)  Rich clients typically offer a better user experience and may offer better performance because the interface and some of the data is kept on the desktop, so there's less need to go to the server for every keystroke.  They may also offer a solution to the desire to being able to work off-line. 

There's nothing that keeps an SaaS application from using a rich client -- nothing but the fact that some "purists" require that these applications be Web 2.0 compliant which apparently means (I'm not sure I agree) that everything happens within a browser, with or without the uplift AJAX can offer the interface.

Read Phil's article and see just how stretchy this market is, and how silly it is, especially in emerging markets where we're still making up the rules, to insist that everyone must be just alike.  I especially enjoyed his comments on how SaaS vendors who know what they're doing and where this is going are using SOA.  This is a pet theory of mine, so I'm delighted to see I'm not the only one who sees this intersection between SaaS and SOA as being a key element to how software will be constructed and delivered in the future.

One Giant Computer (or Five)

There's a provocative article on ZDNet today, an intervirw witih Greg Papadopoulos, CTO of Sun, in which he asserts that the world will end up with five (or some small numberO of big computing systems, suopplying SaaS to everyone else.

Sun, of course, would like to be providing the computer hardware to the eBays, Amazons, and SalesForce.coms of that near-future world.  I'm not sure why they think they're better positioned to do this than, say, IBM.

There are also a lot of comments,  some of them silly, because they compare Greg's remarks to Tom Watson's infamous (and ancient) prediction that the world would only need five computers.  Need we explain that the five enourmous networks of computers Greg is describing, probably not in any single place, is very different than five single mainframes?  (Even IBM is likely to provide networks of computers, mainframes or otherwise, for any large computing environment.)

But Sun and ZDNet's editors do bring up some tantalizing questions:

1. Who will be the big providers of computing services to future users, not just consumers, but businesses?  I suspect that some of the big providers didn't make the ZDNet list because they were thinking more in terms of the consumer providers like Google and eBay and the Web providers like SalesForce.com and they forgot that hosting the infrastructure may be a different job than providing and supporting the applications, especially for business applications.  I'd nominate companies like IBM and the telcos for that job.
2. Who will provide the hardware and infrastructure software for these giant hosters?  Sun has nominated itself, but there are other players who may be more likely.  Again, don't forget IBM is high on the list, but HP could be a player, too.  Microsoft doesn't build HW, but it would nominate itself for infrastructure software (and some mid-market customers might prefer it).
3. Will SaaS be the only mode of computing?  I am the most enthusiastic of SaaS promoters, I confess, but I know that old habits die hard.  I would imagine that some customers will continue to keep things in-house and some applications and data sets are going to stay in-house for good reasons for a long time, if not forever. 

In computing, we add new concepts and technologies to our bag of tricks, but we rarely completely replace what went before.