SaaS Vendors: Practice what you preach.

I have been quiet in March, due to my company acquiring new customers.
Writing blog posts about specialist topics such as SaaS requires a fair bit of regular reading, which was reduced to a minimum for me.
So in lieu of that I am posting on an area which was quite a significant part of what I was doing in March, Release Management and Source Control.

Like many companies, I run a distributed team of developers, some in India and some in Chicago and myself here in the East Coast. Its a major challenge communication wise but very doable if you have the correct tools in place.

True to my previous blog posts, we use lots of virtual tools to enable that communication, but one area we have stuck to traditional methods is source control.
It was an old habit that remained with me throughout the years. We have the usual on site Source Server (running Subversion on Apache) which is only accessible from inside our office VPN with regular offsite backup storage. Now this works fine, but as with all server environments this requires regular server and security support. With customer deadlines, developers were up at all hours of the night, and our internal VPN was experiencing occasional outages. Our guys in Chicago were more than helpful in getting up in the middle of the night to resolve, but this got me thinking, why are we investing in an on premise source control environment while we are trying to persuade our customers to trust us with their valuable and confidential data? We of course use a market leader in enterprise hosting for our production application and database servers which is an environment totally independent and separated from our office network and VPN.

So right now I am looking at possible outsourcing scenarios.

Option 1: Configure your own source server but leverage the infrastructure of a Rackspace or an Opsource.

Option 2: Go fully Software as a Service with your source control.
One in particular I have been looking at is Dynamsoft. If you google hosted source control, they seem to dominate. They offer a variety of hosted options including a free version for up to 5 Mb of source code and packages for Enterprise and ISVs.

It may be hard to consider putting your source code into an external environment, old habits die hard. But the same rules apply to you as a SaaS client. Simply research the SaaS Source control vendors, understand how they protect your code, look at existing customers and be comfortable with backup processes and how you can maintain a copy of the code locally.

I think its worth looking at.

The Enterprise Web 2.0 Generation has arrived!

In an earlier blog post I wrote about why SaaS will become the natural choice for organizations.
I wrote

However what ensures the longevity of SaaS is the next group of CIO's who are in college or have recently joined the workforce. This crop will see Web 2.0 as a totally natural way of doing business as its what they do in their personal lives.
Storing files and documents, in Google, in Microsoft Live, social networking, wikis all are ingrained in this new generation and SaaS will become the obvious choice.

It appears the enterprise world is beginning to realize this.
An article by Heather Havenstein in ComputerWorld published today looks at how "Companies wrestle with tech demands of younger workers".

Chris Scalet, senior vice president and CIO of Merck & Co was quoted

Scalet, senior vice president and CIO of Merck & Co., noticed that as his daughter studied, she simultaneously listened to her iPod, sent text messages and browsed through pages of the Facebook social network.

"How she will work in the future will be very different from how we work today," Scalet said. "She is going to expect [collaboration] tools ... to be able to work. What scared me is that we don't think that way today as corporations. We think as baby boomers [about] this very traditional, structured, formal [work environment]."

Heather also states that IT executives are beginning to plan for the 80 Million children of baby boomers entering the workforce.

In the November 15,2007 Edition of CIO Magazine , editor Elana Varon interviews Gary Hamel,

Gary states that

If you're a CIO, you need to spend a lot of time out on the fringes of the Web because that's where the innovation is taking place. You need to spend a lot of time with people under 25 years old

These current trends all vindicate the work practices (which are contrary to traditional enterprise policies) I have in place with my development teams. I place no restrictions on Social Networking, IMing, private emailing, reading and writing blogs and wikis for my staff, in fact they are strongly encouraged. There are multiple benefits to organizations with these types of practices.

1. We don't really have set hours for working, and if an urgent customer issue,request or deadline arises in the middle of the night, our staff are easily contactable via these mechanisms and collaboration at midnight is often a common thing, our customers are often surprised at how often we deliver overnight. Cell phones are very seldom used in these situations apart from reading emails.
2. Often new product and usage ideas are generated by the usage of Social Computing tools at work and at home
3. Collaboration is taken to a new level, any "productivity loss" from social computing is more than made up by the improvements in communications and the reduction of miscommunication.
4. New staff members feel more comfortable contributing ideas and questions, as they are in an environment very similar to their "college social network".

Once again I will say:
This Web 2.0 generation will provide the tech leaders of the near future,the Cloud is here to stay.

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 Salesforce.com and Rightnow.

SaaS in New Zealand

I haven't been back to New Zealand for more than 3 years, but this Christmas we're heading there for a months vacation. As I count down the days, my wife and I find ourselves surprisingly talking about the food.

Ponsonby Pies,Fresh Fish and Chips, Marinated Green Lipped Mussels, Bluff Oysters,Burger Fuel (my wife's favorite), NZ Thai Food, Vogel Bread, Cheezels, Flat Whites, the list could go on forever. Anyhow I digress,

Being away for so long, its easy to forget that New Zealand is a nation with a surprisingly large number of talented and forward thinking technologists and business people. In my recent readings its apparent that NZ has really embraced SaaS. Paraphasing one of the following bloggers (sorry I forgot which one), due to NZ's geographical isolation, New Zealanders more than most realize that with Web 2.0 and SaaS, your customer base is the entire globe. You are no longer limited by oceans and borders.

I have included here 3 SaaS blogs in New Zealand whom I have been following with great interest.

Unreasonable Men
Diversity - Ben Kepes
SmartBeanz

Love to hear from other Kiwi Bloggers too,

The agility of SaaS vs. the risk of On Premise

I read an article today from PC World titled SAP uninterested in enterprise SaaS

This is a very typical response from a traditional enterprise software vendor who underestimates the pervasiveness and stickability (I like that word a lot better than traction) of SaaS. Lets look at a couple of quotes from this article.

The ERP giant was "not so interested in 'drop-in' services for three or four users, he said. "We want to run the company, we want to run the business, we don't want to just support some services for some users in the company."

This simply indicates the inflexibility and non agile nature of On Premise vendors. Of course they don't want to support 3 or 4 user systems. The cost of sales and support is just too high for them. On premise vendors struggle with both providing customers with new features regularly and version control which Bob at Smoothspan blogs so effectively about.

Back in my On Premise Days we struggled with these exact same problems which haven't changed today.. We had a major product release once a year, the problem was and is how did you deploy that release to all your customers. In the end you don't.

The whole on premise product release process is non agile in nature because of the risks involved. You can't bring out a product release more than once a year because you have to test every permutation of what could go wrong with each customer's installation and build upgrade procedures for all previous versions in existence. You then announce to the customer that there is a new release with a whole bunch of new features and it will cost them 1 million in services to upgrade. They look at the new release, and then say "thanks but no thanks". They look at the risk of something going wrong in the upgrade and say its too risky and too expensive.

In the end you find yourself using your latest release for new customers only and you are stuck with a version quagmire. Its a vicious cycle as each new release then has to cope with yet another older version upgrade.


John Rowell from Opsource also posts about this issue of SaaS vs. on Premise

The beauty of SaaS is obvious, one instance of the application to upgrade and all customers benefit from new features. Because of this, SaaS becomes very agile. You can bring out cool new features once a month because you don't have the baggage of versioning and handling different customer environments.

SaaS also is a whole different philosophy when you begin looking at user counts.
SaaS doesn't care if you are 25000 users or 3 to 4 users. It can handle it all. There is no "sorry you are too small for us". SaaS can't handle large user count systems? Somebody better tell Salesforce.com that, earlier this year they closed a 25000 user deal.

"They would prefer a quick win, that could be some CRM functions on demand," he said.
They might later want to bring in on-premises software, he said. "That would take the risk and cost down."

It was suggested in this article that SaaS was seen by enterprise customers as a short term fix before going to a long term on premise solution.

Once again I will speak from personal experience. We had one enterprise prospect, it was down to us and a traditional on premise vendor, we won the deal because our competitor quoted an 18 month project, with a 7 figure cost, plus annual maintenance fees. We offered a SaaS solution and said we could roll out immediately and would release new features once a month. 6 months later we had one thousand users in multiple countries all using the same instance as all other customers. Consolidation of country data was painless, (can you imagine what this would have been like with an on premise system) and customer feature requests were being delivered monthly with our entire client base benefiting from these enhancements.

Can you imagine a customer in this scenario saying lets implement this SaaS system just for the short term and then go On Premise in the long term? Not Likely...