Wednesday, October 28, 2009

Sendside: Sales Automation and Acceleration as a Service – SaaaaS!

Let’s start with some disclosures. Before I became Director of Research at Focus, I consulted with Sendside, and am a big fan of the company and its management team. So it’s with at least a small dash of personal pride that I write about the company here – but you can and should still take my opinions at least semi-seriously.

That said, observers and pundits, including Gartner, are increasingly saying that if and as the economy begins to improve, one of the first things areas in which companies are going to re-start spending is in sales. Specifically, companies seem likely to invest in solutions that will help them make more sales more quickly and more inexpensively.

Hard to argue with logic like that. No better way to accelerate economic recovery than to shorten sales cycles and increase sales numbers. But how best to do so?

I would argue that anything that helps to engage, inform, persuade and invite prospects to take further action – like, for example, to give your offering a try – is a likely winner here. And I believe Sendside has developed a platform and an architecture that can help almost any company do all of these things, in ways that are automated, repeatable, scalable, economical and effective.

With Sendside, you can combine traditional e-mail with all kinds of other communications, in a variety of formats. What’s really cool, however, is that you can combine these into packages that are as easy to send, receive, open and share as a typical e-mail. No more convoluted combining of documents, spreadsheets, marketing collateral and what-have-you. No more bulky, slow-to-send-and-download giant e-mails. And no more concerns about whether or not your recipient has all of the software necessary to read/see what you’ve sent the way you meant for it to be read/seen. Your electronic outreach is faster, easier, less intrusive and confusing and more likely to be more readily consumed and more effective.

What’s more, Sendside can tell you who’s received what, who’s opened what, and when they did so. This makes following up – what sales and marketing people sometimes refer to as “lead nurturing” – easier, more consistent, and more effective. It can also greatly accelerate sales cycles and prospect conversion.

You can learn a lot more by visiting and downloading one or both of the white papers I wrote for them before joining Focus. One takes an IT-centric view, while the other is more business-focused. Then, check out the Sendside solution itself. Ask the Sendside team to send you a Sendside package, then maybe get yourself a personal Sendside account so you can send some packages to your colleagues. Then, let the Sendside team and me know what you think.

(By the way, if you haven’t read them yet, I also have some thoughts on Microsoft’s new Office Web Applications and their implications for Web-based collaboration. They’re over at my DortchOnCollaboration blog. You might find those interesting as well.)

Monday, August 3, 2009

10 Signs that It May be Time to Consider Software as a Service (SaaS)

Greetings, and many apologies -- it's been a hectic past couple of months, and I'm now neck-deep in a consulting engagement that I'm hoping turns into a full-time job soon. Said engagement is with Focus (, which aims to help buyers of business technologies to make better, more considered purchase decisions. Anyway, I've just published my first piece of contributed Focus research, "10 Signs that It May be Time to Consider Software as a Service (SaaS)," and would be extremely grateful if you were to visit the Focus Web site to read it. It's at Many thanks, and more soon, I promise!

Thursday, June 18, 2009

3Qs, 3As and 3Rs with Treb Ryan of OpSource

So I'm wondering, where best to get some interesting insights (beyond my own, of course!) on SaaS and cloud computing right now? And I figure it makes sense to ask someone who makes a living helping to enable commercial pursuit of those technologies.

(See, it's out-of-the-box thinking like that that's why we industry analysts and commentators garner the huge levels of respect and remuneration we enjoy. But I digress.)

So I came up with three basic, yet insightful questions, and ran them by my respected industry colleague Treb Ryan, CEO of OpSource. Treb's company provides solutions that enable “cloud operations for serious SaaS and Web businesses,” as it says at its Web site. OpSource has a strong partner ecosystem, a pragmatic business focus, and as you'll see below, a pretty sharp CEO.

Dortch: What is the single greatest challenge to success for software providers seeking to deliver SaaS/on-demand solutions?

Ryan: The single greatest challenge of success for a SaaS company is the cost of customer acquisition. Traditional sales models when applied to SaaS [are] very expensive [ways] to grow your business. SaaS companies should look at low-cost customer acquisition strategies, such as free on-line trials, “freemium” products or a robust channel base, to help lower the cost of customer acquisition.

Dortch: What is the single greatest challenge to success for enterprises seeking to deploy business-critical SaaS/on-demand solutions?

Ryan: For companies deploying mission-critical SaaS [or cloud-based on-demand solutions] it [is] usually integration with your existing SaaS and non-SaaS data – ensuring, for example, that you don't have a separate employee record for example in your Taleo [on-demand talent management solution] implementation than you do in you payroll system.

Dortch: What do you see as the next "great leap forward" for the SaaS/on-demand solutions market – technological, organizational, perceptual or otherwise?

Ryan: Ubiquitous APIs [application programming interfaces]. All SaaS data and interactions will be available as standardized API calls to any other cloud application. This will solve the integration question, open up new channels in the form of value-added solutions and really open the SaaS world [up] to whole new levels of innovative cloud applications based on multiple data sources and interfaces. Think of the unified contact [management features] on the new Palm Pre that brings in information from Facebook, LinkedIn, your personal [contacts] and [Microsoft] Exchange. Very cool.

First off, big thanks to Treb for the time and the interesting observations and insights. Now, my recommendations.

If you are or wish to become a successful SaaS or cloud-based solution provider, unless your solutions focus specifically on IT infrastructure management and optimization, try to stay the heck out of that business. Getting into it if you aren't there already is not only asking for trouble, it's almost guaranteed to make customer acquisition and other operational imperatives more expensive and difficult. It also flies in the face of the primary benefits of SaaS and the cloud.

If you are deploying or wish to deploy SaaS or cloud-based solutions, you should start with a clear, detailed plan of what specific business goal(s) or benefit(s) you're trying to achieve. That plan should include a detailed assessment of current relevant assets, including the information driving business decisions, actions and processes today. You may find that you need a foundation of accurate, consistent and timely information before you need any new SaaS or cloud-based solution. (See my column, “For MDM, start by getting to know your enterprise data” for more on this – it's importance extends way beyond SaaS and the cloud.)

Whether you are or want to be a SaaS/cloud-based solution provider, user or both, focus your attention on technologies, providers and partners that support open, well-documented APIs. Even if you never write a line of code, APIs represent a safety net of interoperability and integration that can smooth and increase the business value of your SaaS/cloud-based solution. It can also help keep you away from that nasty infrastructure stuff I mentioned earlier.

More from some of those I consider “the few with a clue” in upcoming outings. If you've got subjects or people to suggest, or questions or comments, do please let me know here and/or at

Wednesday, June 3, 2009

Heard of Rearden Commerce Yet? You Will...and Soon!

How about an on-demand, electronic personal assistant that can help you and your company save money – as much as 40 percent – on travel, shipping and almost everything else you and your colleagues do or use?

Is that a value proposition that gets your attention, or that of your CFO or CEO? If not, either I'm not being sufficiently clear, or you should be seriously considering a job change. I'll try again; you do what you think you need to do after reading a bit more.

Rearden Commerce provides an on-demand platform linking business users with services ranging from hotel, air travel and car rental reservations to airport parking, conferencing, shipping, international mobile telephony and expense management and reporting.

Rearden forms alliances with providers, negotiates discounts wherever possible, and sometimes acquires companies outright. For example, Rearden now owns ExpenseWire, developers of the expense management solution resold by leading payroll processing provider Paychex and the Orbitz for Business travel service. It also owns Global Ground Automation, developers of software that automates ground transportation reservation management. Strategic allies include American Express, JP Morgan Chase (watch this one!) and the above-mentioned Paychex. Rearden claims that more than 160,000 suppliers and partners are using its platform to deliver services to more than 4 thousand corporate customers and 2 million users.

All this means you or your company can take advantage of in-place discounts negotiated directly or by Rearden, or price-shop among available competitors Rules-driven software ensures spend management and the best available price on each purchase. And it's all accessible via a single interface, the Rearden Personal Assistant, which runs on computers and a growing range of mobile devices.

Unified business service access and spend management as an on-demand service. If reining in costs while providing easy access and choice gets any better than this for business users, whether corporate or individual, someone please show or tell me – but until that happens, if you run a business, work for a business, or are a business and you consume business services, you've got to check out Rearden Commerce. I think it's a prime example of a SaaS solution that delivers business benefits across the entire value chain, from service providers to the companies and individuals that do business with them – with (almost) no IT infrastructure required.

Tuesday, June 2, 2009

Imitation Being the Sincerest Form of Flattery...

...I am borrowing an idea from my former Aberdeen Group colleague and the coolest enterprise mobility analyst I know, Philippe Winthrop, an analyst at Strategy Analytics and the guy behind the most excellent blog "Enterprise Mobility Matters." In his recent posting, "Fireside Chats on Enterprise Mobility," he describes a nifty interviewing methodology he's introduced at his blog.

Quite simply, I'm borrowing -- NOT stealing -- and adapting it for those of you interested in SaaS and cloud computing. (At MIT, where I went to school, they said MIT students never lie, cheat or steal -- they elaborate, collaborate and borrow.)

I'm starting to e-mail questions to some of the people I believe to be the leading lights in the industry, and will share my questions, their answers, and my reactions to them with you here. So stay tuned, and send suggestions for interview subjects and questions you'd like to see them answer. Meanwhile, thank Philippe for me, should you see him or visit his blog, which I strongly urge you to do!

Monday, May 4, 2009

Why the Akamai-OpSource Mash-Up Is Important -- to SaaS Vendors AND Users!

You may have missed it in all of the recent SaaS-related hullabaloo, but back on March 30, Akamai and OpSource announced a joint relationship that had actually been in place since late 2008. The companies have been working on joint solution offerings that combine OpSource's Web operations management and optimization services with Akamai's high-performance, highly reliable application and content delivery services and worldwide facilities. (If you're a quick and focused reader of your Web browser's status bar or its equivalent, you can see many major Web sites actually pulling content from Akamai servers as those sites load.)

Now, other SaaS infrastructure solution providers are focused on making the technologies work and keeping them working – incredibly worthwhile goals, make no mistake. However, the Akamai-OpSource alliance is really focused on providing a more business-centric infrastructure. The two companies are offering the delivery, hosting, and operations services that let SaaS solution providers focus on what they (should, at least) do best – delivering good software.

Akamai also announced access control and customer visibility enhancements to its Web Application Accelerator service. The improvements are intended to ease access to Akamai-hosted SaaS and Web-based solutions from behind corporate firewalls, and to tell SaaS solution providers more about what their users are and aren't doing with those solutions.

Taken together, I think these announcements address two parallel sets of needs in ways that are quite effective. Akamai, especially in concert with OpSource, is helping to deliver levels of visibility into SaaS solution delivery that makes that process more reliable and easily manageable. At the same time, that visibility is reducing the “FUD,” or “fear, uncertainty, and doubt” still plaguing some SaaS skeptics. You can not only see when and where things break or go wrong (a technological focus), but you can see how well things are working when they are working well (a business focus).

I'm a big fan of both Akamai and OpSource. I think their alliance is a harbinger of good things to come for SaaS vendors and users. If you're one of those users, or considering becoming one, by the way, you should start immediately questioning current and candidate vendors about their use of or response to the current and likely forthcoming results of the Akamai-OpSource alliance. Those taking advantage of alternatives such as the alliance's offerings may stand a better chance of avoiding problems that can cause disruptive or fatal challenges to all but the strongest SaaS vendors – as I've warned here previously. (To see what I said, please see “Enabling the Inevitable: Selecting Strong SaaS Providers” and “Are Your SaaS Vendors in Trouble? And If So, What Can/Should You Do?” -- and let me know what you think.)

Oracle's New SaaS Offerings: The Last Nail in the Coffin for "Bits on Disks?"

What a difference two weeks, 10 months, some acquisitions, and an economic downturn can make.

Two weeks ago, I opined in this space that Oracle's acquisition of Sun Microsystems could soon result in some new SaaS offerings. And last June, Larry Ellison was widely quoted as saying SaaS offerings weren't profitable enough -- although he was also widely reported as expecting that to change.

Well, it's changed, at least according to today's Oracle-related news stories. They seem to indicate that Oracle is planning to launch several (maybe seven?) new SaaS offerings really soon, according to stories in The Wall Street Journal (subscription required for full access), at VNUnet, and elsewhere. And I believe'em.

Since that June 2008 conference call with Larry Ellison, Oracle's launched a new release of its CRM On Demand solution, and Oracle Sourcing On Demand, a SaaS tool for supply management. And its Oracle On Demand Web site claims 4.5 million end users.

Oracle is serious about SaaS. And that means all the other SaaS and cloud computing solution vendors had better get ready for some aggressively serious competition. This should benefit users in terms of broadening choices and perhaps creating opportunities for advantageous contractual negotiations. But it is likely to get rough for those solution developers and providers without deep pockets, loyal, evangelical customers, or both. Such vendors are likely to be acquired by Oracle, acquired by some other larger and more stable vendor, or to disappear. Which won't be good for those users who've bet their companies' competitive agility on those vendors without sufficient protection, as I've discussed here previously.

Given Oracle's latest and anticipated SaaS moves, Microsoft's continually evolving SaaS/cloud strategy, and everything and its partners do, the next 12 to 18 months could be the most interesting and challenging for SaaS and cloud computing users and vendors since...well, since the last 12 to 18 months.

So, as I advised two weeks ago, stay tuned. And feel free to let me know your thoughts, hopes, fears, and plans in response to all of this, if any. And you might consider reducing or eliminating as many long-term commitments to and investments in traditional software licenses as practical for your organization's particular needs. While the future of SaaS and cloud computing is roiling, the future for most traditionally licensed "bits on disks" seems certain -- and limited at best.

Monday, April 20, 2009

Oracle + Sun = More SaaS Options (Especially for SMBs)?

As I discussed with my learned and respected industry colleague Frederic Paul of earlier today, Oracle's acquisition of Sun Microsystems could result in nifty new software as a service (SaaS) offerings for SMBs and larger enterprises as well. Here's how.

1. Oracle's Fusion Middleware platform is built entirely upon Java, for which Sun is the principal commercial shepherd. Java's a great solution for building and delivering new applications, SaaS-enabled and otherwise. Greater integration among Java, Fusion Middleware, and applications and databases could and should make SaaS-enabled solutions easier and faster to build and deliver.

2. Sun is fairly experienced at delivering SaaS and cloud computing solutions, especially to large customers and in concert with partners.

3. Both Sun and Oracle understand what larger companies want and need to make SaaS and cloud computing solutions "enterprise-ready." At the same time, each has had some success at packaging and delivering solutions for smaller enterprises, often scaled down from those enterprise solutions. And each has partners good at supporting SMBs.

3. Despite public pronouncements to the contrary, Oracle leadership understands that SaaS and cloud computing are going to be significant alternatives to traditional "bits on disks" and premises-based servers. (Oracle still holds a big stake in, as I understand it.)

4. The combination of Java, Fusion Middleware, Oracle applications and databases, and Sun servers and services means that Oracle could offer a range of premises-based, SaaS, and cloud computing solutions through its significant partner ecosystem. Many of these solutions could be scaled down, integrated, and pre-configured into SMB-ready offerings, much as IBM does now with its "Express" portfolio. But the ability to deliver software and services AS services bodes well for Oracle plus Sun, and perhaps for users seeking alternatives to expensive and difficult-to-manage premises-based IT infrastructures.

As we analysts love to say, "stay tuned..."

Wednesday, March 25, 2009

Are Your SaaS Vendors in Trouble? And If So, What Can/Should You Do?

So what do green energy, software as a service (SaaS), radio frequency identification (RFID), and their offshoots and affiliates all have in common as industries or markets?

Two things, for the purposes of this particular rant.

Thing the First is that they were all predicted as recently as the end of 2008 to be some of the few areas that were likely to weather what was (apparently) seen by many (but not everyone) then as a looming but temporary economic...unpleasantness.

Thing the Second is that given the significantly more robust and sustained nature of said...unpleasantness, all three of arenas are facing significant, sustained challenges. In many cases, these challenges are life-threatening to at least some companies – and unspoken of by almost all of them, especially those not publicly traded and therefore compelled to make at least some financial disclosures.

Now, it's not lost on me that among SaaS companies, is not only a market leader and publicly traded. According to its most recently disclosed financial information, while challenged, it is not in any real, imminent danger. (As I expected during the recent media mini-furor over whether or not SaaS was going to make it, or something like that.) I worry far more about the ecosystem of smaller and emerging SaaS and SaaS-related suppliers, including some of's partners.

I especially worry when I see no recent announcements of major customer wins, or even significant pilots. I also worry when I see no announcements of strategic alliances – or see what are touted as such, but that include no laudatory statement from any senior executives from the supposed “strategic partner.”

I'm not sayin'. I'm just sayin'.

Green energy is not one of my core strengths, so I'll leave that to others more expert and focused than I. (I would But where SaaS and RFID are concerned, well, I'm concerned. And I'll have more to say about both Real Soon Now. Meanwhile, though, if you don't have them in place yet, craft, execute, and enforce some effective, protective, and business-driven service level agreements (SLAs) with every SaaS or RFID vendor or reseller critical to your business. And keep close tabs on the financial health of those vendors. To the extent that such tabs are possible, at least.

Monday, February 9, 2009

SaaS Growth Halted Immediately as Executives Flee – or Not...

SaaS Growth Thrown Into Question,” wrote my former colleague (and, despite my past influence, one of the most insightful people I know) John Foley for Information Week's cloud computing blog last Friday.

Shakeup at,” wrote Ben Worthen for the Wall Street Journal's “Digits” blog on the same day.

Tough Times at,” wrote Jeffrey M. Kaplan for “Seeking Alpha,” a fairly cool Web site devoted to stock market opinion and analysis, just today.

Do these folks know something you and I don't? Maybe – but I don't think so.

What got them all cautious was the departure from of Steve Cakebread, now-former president and chief strategy officer, and two senior sales executives, Gary Hanna and Dave Orrico. Oh, and the fact that canceled its European edition of its annual multi-day tent revival/prayer meeting, Dreamforce, in favor of a free, one-day event. And the fact that stock fell about 5% on a day when a lot of other stocks went up.

But seriously, if you were Steve Cakebread, which would you really rather help to run right now?, from which he'd already tried to retire once, or your family-owned, high-profile, high-quality Napa Valley winery? I live in Sonoma County, which is often seen as a friendly competitor to Napa, and I know which one I'd pick – and I'm a big fan of and SaaS in general.

As for Messrs. Hanna and Orrico, with all due respect, it could be and has been argued by others that there might have been too many sales executives at the company anyway, especially given the current economic turbulence.

And regarding replacing Dreamforce Europe with Cloudforce London – well, I've been saying for some time now, most recently in a December 2008 blog posting, that the big trade show is probably going the way of...well, bits on disks versus SaaS, just to pick an analogy at random.

Is in trouble? I seriously doubt it. Is it facing uncertainties, and the prospects of fewer, smaller deals and even some customer churn during the next few months? Almost certainly. But when I look at the range of resources the company has, particularly its ecosystem of partners, the Foundation, and the team still in place, I can't help but believe the company remains a good bet for users, partners, and even investors. Yes, there will be more competition for customer dollars, from companies such as SaaS solution provider Zoho and platform-as-a-service (PaaS) purveyor LongJump. But has enough irons in enough fires, and enough bright, clever people committed to its success and that of its customers, that it will weather this storm just fine.

What does it all mean, then? If you're a user considering SaaS with little to no investment in solutions, it “couldn't hoit” to look at some alternatives, including those from the two other vendors I just mentioned. If your company is already invested in solutions and relationships, don't panic – just ensure your contractual terms are known, well-documented, and sufficiently favorable to and protective of your company.

And if you're wondering if overall growth of the SaaS/PaaS/on-demand software market is in jeopardy? Well, I'm still predicting growth in 2009 and beyond. It may be slower than the past few months, and it may be distributed across more companies than I and others may have originally thought. But the basic dynamics remain the same – companies want to do more with less, and SaaS and its related technologies enable that more easily and economically than almost any alternative. And Jeffrey Kaplan apparently agrees with me. In his above-referenced blog entry, he states:

“I’m convinced will withstand the current crisis, just as I’m confident that the SaaS and broader cloud computing market will prosper long-term despite of today’s economic challenges. is still the biggest and among the most influential players in the SaaS and cloud computing market, and I’d much rather be in the on-demand services sector than in either the housing or automotive industries.”

Mr. Kaplan adds that critical to the survival and success of SaaS companies will be their abilities to focus on tangible benefits, such as cost savings or higher sales productivity, operating efficiency, and/or customer satisfaction. These are the kinds of things you should focus on, too, if you're trying to consider or promote SaaS solutions at your company, whatever its core business or size. Meanwhile, let's stop wasting time speculating, and build better business infrastructures and service level agreements (SLAs) for managing vendor relationships effectively, while we wait for credible public statements, from and elsewhere.

At least, that's what I think. What about you?

Tuesday, February 3, 2009's Latest Release: New Features AND New Transparency!, provider of SaaS-based IT service and infrastructure management solutions, will officially announce on Feb. 5 the Winter 2009 release of its software platform. It's the company's 15 software release in more than three years, and most users never even noticed, since they were at home for the weekend. Once they got back to their computers, though, they saw some pretty nifty new and enhanced features, such as:

  • The ability to open, update, and close service requests, incidents, problems, and changes from Apple iPhone, Google Android, and RIM Blackberry mobile devices, to replace those sticky notes that tend to follow IT infrastructure and service managers around;
  • Powerful, role-based global search of people, policies, processes, tools, and other resources;
  • Home page and dashboard layout and content management features that enable companies to leverage familiar “look and feel” features and to decide based on their unique requirements who sees what information in what forms;
  • Graphical workflow features that ease and speed application creation and modification without extensive “plumbing” requirements; and
  • Project management features that integrate with the software's change, release, and service level management features.
I'll have more to say about these features and why they're both important and valuable in upcoming outings. For now, suffice to say that I'm impressed with the alignment of these features with the features a lot of users I've spoken with want from their IT service and infrastructure solutions.

Equally compelling, the privately held company is also planning to disclose at least some high-level financial results, including recurring annual revenues approaching $20 million, 235 enterprise customers and 2.1 million users in 30 countries, and 18 consecutive months of positive cash flow. If the company continues moving forward through the current economic unpleasantness, as many of us expect the larger SaaS market to do, it could position itself well for sustained growth. It could also become perceived as an increasingly safe bet for those companies considering or pursuing SaaS and interested in the financial health of current or candidate vendors. Which should be all of the companies considering or pursuing SaaS. As I may have mentioned once or twice previously. understands that success with SaaS is about much more than SaaS technologies. It's easier to be open when the news is good, but I've got to believe earlier, consistent openness helped to lead to's good news. Along with effective, useful technologies, of course.

More soon. Stay tuned.

Savvis' Savvy SaaS Moves

[UPDATED with financial information and recommendations below.]
In December 2008, Savvis announced that it had successfully completed its fifth consecutive SAS 70 Type II examination. As I've written here previously, SAS 70 compliance is a strong indicator that an infrastructure provider's own infrastructure is reliable and robust.

In January 2009, Savvis made what I think is one of the most interesting staff-related announcements by a SaaS-related vendor so far this year. The company hired Thomas Riley, former U.S. Ambassador to Morocco, as Senior Vice President and Managing Director of Savvis International. Riley's charter is primarily to grow the company's international business, especially in Europe, the Middle East, Africa, and the Asia/Pacific regions, Savvis said.

On Feb. 2, Larry Steele, Savvis' Vice President of SaaS, published a piece at (where I blog about business intelligence, by the way), entitled “Do You Need a SaaS Hosting Provider?” “While many vendors understand what it means to host an application and provide it to customers via the Web, few fully recognize the transformational elements that are necessary to successfully implement their SaaS offering,” Steele writes.

I agree. This is why I'm advising every current or potential SaaS vendor to read Steele's piece, as well as the Andre Yee ebizQ piece I referred to in an earlier blog entry. I also strongly recommend that every current and potential SaaS user read these same pieces, and use them to craft questions and standards for current and prospective vendors. And those users and vendors should add Savvis to their short lists of SaaS infrastructure support providers with which it's worth having detailed conversations.

Meanwhile, Savvis, which is traded on the New York Stock Exchange, announced earlier today year-over-year revenue growth for the latest financial quarter and for the year as a whole. The company added that it achieved positive free cash flow for the first time during the fourth quarter of 2008. Savvis expects 2009 to be economically turbulent -- among other things, a major client, the American Stock Exchange, is being acquired, which could result in up to $27 million in lost annualized revenues for Savvis. But while the company is offering no guidance regarding anticipated 2009 financial results, the company is committed to continued growth and positive free cash flow, according to a spokesperson.

Well, let's hope so. Meanwhile, though, these results jibe with what I'm increasingly seeing as a general condition for SaaS vendors and users. The industry is experiencing the same downturn as the rest of the economy, but seems poised to weather the storm more robustly than perhaps many other market segments. This bodes well for SaaS users, especially those who do their homework and focus on vendors with strong commitments to both technological and financial robustness. As you may have read here previously. At the risk of repeating myself. Again.

Thursday, January 29, 2009

Enabling the Inevitable: Selecting Strong SaaS Providers

At ebizQ, where I blog primarily about business intelligence, Andre Yee, senior vice-president for products at Eloqua, blogs about SaaS. He recently posted an entry I recommend to everyone -- "Is SaaS Enterprise-Ready? How to Assess Your SaaS Vendor." In this intelligent and helpful post, Yee recommends that potential SaaS users look at their candidate vendors from several key perspectives, to determine if those vendors have what it takes to support those users' business requirements. Specifically, Yee recommends getting all the information available about:
  • Reliability;
  • Security;
  • Scalability;
  • Business Process Integration;
  • Data Conversion Services; and
  • the ability to pass a SAS 70 Audit. ("SAS 70," according to Wikipedia, "defines the professional standards used by a service auditor to assess the internal controls of a service organization and issue a service auditor’s report." Without getting into too many more details -- yes, it's very, very important.)
I agree that all of these are important criteria, whether the "enterprise" doing the evaluations is large, small, or in-between. However, there are two other criteria that are at least as important as any or all of the above -- and perhaps the most difficult about which to obtain accurate, credible information.

One is interoperability, with other SaaS solutions and with incumbent infrastructures and applications. The other is financial stability.

Of course, interoperability with what's in place seems obvious, but is frequently inadequately addressed by those seeking to implement new solutions, SaaS-based or otherwise. And where SaaS is concerned, interoperability with other SaaS solutions could become critical. If your company decides a particular SaaS solution needs replacing with another, that effort should not require a fleet of forklifts.

Further, if you're betting on a particular SaaS solution and vendor, that bet should be as safe and well-covered as possible. And no company can bet its own competitive agility on any vendor that may not be around long enough to sustain the promised advantages of SaaS.

But "interoperability" is a slippery slope, and many if not most SaaS vendors are privately held, making financial information difficult or impossible to obtain. As the computer in Douglas Adam's incredibly wonderful book "Life, the Universe, and Everything" said, "Hmm...tricky."

One incredibly useful step: find out who's actually providing and managing the SaaS vendor's infrastructure. See if they're working with proven providers and solutions, such as's platform, Google, or's Amazon Web Services, or with specialists such as OpSource or Inforonics. And get as many details as you can about how deep those relationships are, and how stringent and enforceable the relevant service level agreements (SLAs) are as well.

Another is to look closely at every SaaS vendor's partner ecosystem. This not only tells you how broadly supported a vendor and its solutions are by other companies, but also offers clues as to options for an exit or transition strategy, should one become necessary.

Still another good step: make sure your company's own IT infrastructure (and yes, your company does have one, extensive or not) is sufficiently well-managed to be "SaaS-ready." I'm a big fan of for this, because they offer SaaS-based solutions for IT infrastructure management. But any approach you find that enables effective management without making it another full-time job for your company is better than no management at all, a situation I've seen all too often.

SaaS may be inevitable for a lot of businesses, but it's not going to be without challenges for many if not most of them. So, as should be done with every significant business decision, "trust, but verify."

SaaS: Resistance is Futile!

Boy, I do so love it when multiple minds start seeing things in similar ways in this often fractious world of business-centric IT...

So IDC, respected market-watchers, have issued a release about a new study called "Economic Crisis Response: Worldwide Software as a Service Forecast Update." In said study, IDC has increased its year-over-year growth forecast for software as a service, or SaaS, from 36% to 42% by year-end 2009. "Recent IDC surveys and customer interviews support the finding that the harsh economic climate will actually accelerate the growth prospects for the software as a service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications. Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams," IDC said.

This follows by something like two weeks my last published work for Aberdeen Group (my position and several others were eliminated recently), an Analyst Insight entitled "SaaS and RFID: Key Business Value Enablers in 2009." Based on a survey I conducted in September and October 2008, I found that business users are pursuing SaaS primarily to meet increasing demand for new applications, maximize the ROI of their IT investments, and manage escalating IT infrastructure costs. (You can read the entire Analyst Insight here, if you are a subscriber to Aberdeen's Vault service.)

And if that's not enough convincing, I also blog about business intelligence at ebizQ, where an earlier version of this very post first appeared days ago. Also at ebizQ, my esteemed industry colleague Treb Ryan, CEO of OpSource, wrote a piece entitled "How SaaS Companies Can Survive the Downturn." Now, since Treb and his team sell solutions for SaaS and Web-based companies, his perspective is a bit more focused on them than on their customers. But the points he makes are points users should take to heart, for reasons which should become clear in another paragraph or so.

Look, here's a quick take on the bottom line of all of this. Almost none of you reading this is in the full-time business of managing software or IT infrastructures. As I've said previously elsewhere, the less effort and fewer resources you have to devote to such things, the more you can devote to making your business more competitively agile and impressing your customers, partners, prospects, and internal users.

SaaS, when implemented effectively, can deliver these and other benefits, rapidly and economically. And it can do so with and for a variety of business applications and functions, from BI itself to, perhaps ironically, IT infrastructure management. (For a great example, check out, if you haven't already, and compare it to traditional tools or doing nothing, as many companies do today, unfortunately for them and their customers and partners.)

If your company's already using SaaS, assess the success of incumbent efforts, and use them to map out plans for identifying and pursuing opportunities for additional deployments. If your company's not yet using SaaS, find some credible advisors and vendors, and talk to them. I promise you, your competitors, including that start-up you haven't heard of yet, are already doing so.

SaaS is not just the latest take on previous software delivery models such as application service providers or ASPs. True SaaS uses modern technologies to free users from the burdens of managing traditional "bits on disks" and supporting infrastructures, so those users can focus on running their core businesses.

If you're a current or potential SaaS user, make sure to pick vendors and solutions that are both sufficiently reliable, robust, and scalable to support your needs and goals today and over the long haul. If you're a current or potential SaaS vendor, make sure to pick technologies, policies, and practices that credibly and demonstrably make you one of the vendors I've just ecouraged users to pick.

I'll have lots more to say about these and related subjects, so drop by often, and feel free to post comments and/or drop me a line at to offer criticism, encouragement, or suggestions -- especially for potential SaaS-related projects with which I might be able to help you and your organization!