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 SearchSAP.com 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 medortch@dortchonit.com.

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.

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!

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 Salesforce.com 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.

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

As I discussed with my learned and respected industry colleague Frederic Paul of bMighty.com 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 Salesforce.com, 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..."

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, Salesforce.com 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 Salesforce.com'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.