More Enterprise SaaS

As I sat down to write this Blog entry, the SaaS market welcomed the entrance of Amazon’s SimpleDB that will let developers and companies store simple tables in the Amazon’s cloud. The SimpleDB is yet another example of the shift from in-premise software deployments to the SaaS model – slowly but surely.

SaaS is a new model and it will take years before it will be used in lieu of in-premise software deployments more pervasively. Though, the actual impact of SaaS on enterprises is debated among the Internet leaders, nobody would argue against the SaaS shift and it is a market that no one wants to ignore. The jury is still out there as which companies will be the eventual leaders in the SaaS space, but the participation of all big Internet players has guaranteed that it will only get more interesting with time.

For my discussion, I will divide the Enterprise SaaS into two broad categories: Infrastructure SaaS and Application SaaS.

Infrastructure SaaS

Over the years, infrastructure installation configuration tasks have improved considerably through better user interfaces and more thorough introspections of the target environments. In contrast, the day-to-day administration of the infrastructure software has gotten more complex due to the advancements in the applications that use the infrastructure software. Today as before, every Enterprise still has to hire skilled system administrators, security administrators, backup administrators, database administrators, and web server administrators to keep these infrastructure software deployment running smooth and securely. The Infrastructure SaaS is mainly employed by the companies that want to do away with the internal infrastructure software installations, for some part, at least.

The contemporary infrastructure SaaS is mainly centered on the online backup storage services. However, Amazon is changing this slowly by coming up with more sophisticated Infrastructure software services. Amazon’s S3, EC2, and SimpleDB services can move real time storage, computing and databases into the cloud. Google, which by far runs the world’s biggest cloud computing cluster to deliver search, advertisements and apps, has surprisingly stayed away from the Infrastructure software SaaS. However, Google and IBM did join forces to generate an academic interest in the cloud computing science. It remains to be seen as which companies will be the eventually leaders in the Infrastructure SaaS space.

Application SaaS

Salesforce.com’s CEO, Mark Benioff, saw the Application SaaS dream in 1999. As I said in my last Blog entry, the entrance of big players such as Microsoft, Intuit, and the creation of new big players – Amazon, Salesforce.com, and Google – in the last few years have finally forced IT departments to take a serious look at the Application SaaS.

To make my Application SaaS discussion more specific, I will divide Application SaaS into three sub-categories.

Collaborative Application SaaS

Zoho, Microsoft Office Live, Cisco’s Webex and Google Apps are the few prominent players in Collaborative Application SaaS space. The new players are popping up, however, eventually they will either die or will be acquired by the big players. Santa Clara Cricket Club, a non-profit social organization, where I serve as a CTO, uses Google Apps SaaS. Recently, I was interviewed by the Google communication department regarding my implementation of Google Apps. I was asked why I had used Google Apps to run my organization. I answered that I saw the market shift towards SaaS products and realized it could transform my own organization. I implemented Google Apps SaaS for my own organization to confirm my understanding. At the end, I was very glad to move all of the features development work to the Google’s engineers for free!

Platform Application SaaS

Salesforce.com’s AppExchange is considered as the pioneer in the Platform Application SaaS. As of today, it has more than 725 application components that can be integrated into the Salesforce.com SaaS application(s). However, earlier this year, the opening of FaceBook as a platform to run third party applications has added a social twist to the Platform Application SaaS. The Social Platform Application SaaS has created a new market in itself. After Facebook’s announcement, other Social network players such as MySpace, LinkedIn, Bebo and Hi5 have also either opened their platforms or are in the process of developing a platform to enter into the Social Platform Application SaaS market. The Google’s OpenSocial has a potential to make developers’ life easy, however, I will wait for the market to confirm that in the next few years.

Business Application SaaS

This is the category that is getting most attention from Enterprise IT departments. Salesforce.com, Quicken Online Services, NetSuite, Microsoft CRM, and Workday are few prominent examples in the Business Application SaaS. Recently, SAP entered into this by creating a SaaS offering for the mid-market customers. Oracle already has CRM SaaS through its acquisition of Siebel.

Though, we have a big push towards the Business Application SaaS, I still believe that the enterprise software development is very hard and will remain hard. It is more art and less science. The big players took twenty years to create platforms that can be customized to meet large enterprises’ complex business processes. The Business Application SaaS is forcing the same issue again but moving it into the cloud. Jeff Huber of Google recently said that the platform wars are over and the Web is the winner. I could not agree more. The creation of a cloud-based SaaS platform that can support complex enterprise business processes is not an easy job. It will be the hardest job done when completed, if ever. The companies that embrace the SaaS shift early will be the winners at the end.

Every shift in the technology industry kills some existing players and creates new players. The SaaS shift will do the same. However, as with any shift, no body knows which companies will die, which companies will thrive and which new companies will be the next Oracles, IBMs, Salesforce.coms, Facebooks, Googles, Yahoos, Microsofts, Intuits, eBays and Amazons in 2020. Unfortunately, I can only connect the dots backward and not forward, otherwise, I could have predicted the next leaders. Nevertheless, the question is not “Why SaaS” any more; instead it is “When and how SaaS”. Do you know “When and how”?