Saturday, November 10, 2007

Appliances offer more than 'On Premise' less than SaaS

One of my favorite bloggers, Bob at SmoothSpan has a post (almost one month old now, but its taken me that long to think through it) which discusses the question Are appliances SaaS?

A growing number of vendors are delivering a service platform where their software is either deployed to the customer
1. In a Hardware package which is plug and play in customer network.
2. A Virtual Machine which can be downloaded and installed by the customer.

These appliances contain all the application components needed to run the service application including the DBMS.

Appliances are definitely an improvement over a traditional On premise solution, but there are a number of key support and operational challenges that SaaS handles well and Appliances do not.

1. Appliances tend to have better Version Control and Management for Upgrades than On Premise solutions. Vendors can push updates out to their entire network of installed appliances, which means there is no version mess and support burden of handling different products.

But there is a question mark about the reliability of this process when dealing with large numbers of appliances. I can guarantee that if you send an update to enough appliances, that a number of these updates will fail.

This could be caused by the usual risk factors:

1. Network outage on Customer side during. Less likely to happen in an established hosted provider like Opsource
2. If the software update has database schema changes, something could crash during this process. If you are updating thousands of databases this could very well happen.
3. Security and Permissions have been changed.
4. Hardware failure

On the other hand, one of Bob's respondents stated a major benefit of a Virtual Appliance is that it gives the client the opportunity to test the update before applying to production and even goes so far as to say that this is preferred at times over the risk of a single update in a true SaaS application. I would suggest that the opposite is true. In one of my earlier blog posts I discuss the huge problem 'on premise' vendors face with versioning and upgrades. The same holds true for virtual appliances albeit with less risk of the OS environment changing. Customers will test at their own pace, and more often than not the decision to upgrade will be delayed sometimes indefinitely. You therefore lose some important agile benefits of a SaaS system. Customers do not regularly get updates and miss out on new features, the SaaS vendor spends more time on supporting, developing and testing for different versions with updates having to handle different environment scenarios which has a direct impact on service delivery, and more time is spent working with the customer through the QA phase and working through potential objections to the upgrade.

There is no doubt that Appliances are superior alternatives to On Premise, in fact an integration appliance should be your first choice, if you have a mix of SaaS and On premise systems which require integration from behind the firewall. A Good example of this is Cast Iron Systems which has appliances for SaaS systems and Rightnow.