8 Myths of Software-as-a-Service 169
abb_road writes "BusinessWeek looks at the current state of software-as-a-service, arguing that the model is well established and is distinct from failed ASP/Hosting models of the dot-com era. Far from a passing fad, the model is starting to see large-scale adoption, and traditional vendors are having trouble revamping their applications and financials to get in on the action. From the article, 'As SaaS gains mainstream acceptance, it is becoming an important disruptive force in the software industry. And as long as the quality and reliability of SaaS solutions continues to improve, the appeal of SaaS isn't going to go away.'"
What a stupid clueless article ... (Score:5, Interesting)
How does it fit in with this article? (Score:3, Interesting)
Which seems to imply at least some backlash and return to 'on premise' models of software.
This press relase brought to you by Salesforce.com (Score:5, Interesting)
First off, it isn't cheap--Salesforce.com is $65 per month, per seat and it has to be paid 3 months in advance. This makes it quite a bit more expensive for small businesses than say Goldmine or ACT. Secondly, the reliability was horrible. CRM is the lifeblood of any organization. *Any* downtime results in all of your customer facing people (sales team, customer support staff, billing, etc) basically sitting around on their hands. Sales leads were lost and customers were pissed off. The worst part about it is that we couldn't do anything about it. I couldn't reboot a server, rebuild table indexes, sacrifice an intern... nothing. I wasn't told what the problem was when the system came back up, nor was I even notified *when* they came back online. And I wasn't given an apology or a service credit.
After several very public blackeyes Salesforce finally released a systems status page. In a pure act of corporate hubris they named it http://trust.salesforce.com/ [salesforce.com]. You know know something's deeply wrong when a simple status screen is given that hard of a PR spin. Sorry, but they already blew my trust. I don't care what BusinessWeek says, I wholeheartly recommend that an organization keep their key systems in-house!
Nice report (Score:3, Interesting)
Ah, the dreaded "software issue" problem. Maybe they should contact AOL; it might be related to their recent software glitch [slashdot.org] incident.
What about getting to the data? (Score:1, Interesting)
Take Netvibes [netvibes.com] for example. I have my favorites stored there, which is great because I can access them from anywhere. However, when their site is down (and it has been time and time again), I don't have access to them. No problem I thought, I'll just export them. Exporting is mentioned in their Wiki. Unfortunately, the devs never caught wind of that requirement! If these were local, I'd have more types of access to them than simply via a webpage.
The location and security of my data are the top issues with using internet services as opposed to client-side applications.
While there are benefits, there are drawbacks too, and some of them are dealbreakers for me.
Business vs. Consumer (Score:2, Interesting)
Back to SaaS, though...We're in the process of implementing some new SaaS at my current company. Having done some work on it, I'm not impressed. It's clunky, slow, and difficult to navigate. It has nowhere near the performance of the current local app we use...and that's with only a handful of users on the server for testing. I don't even want to think about what it's going to be like after rollout to the rest of the company.
The other facet of SaaS is going to be companies trying to get this out to consumers. I don't see it replacing hard-copy software sales just yet. (...For which I am thankful - I'd rather have something physical for my purchase, or at least a download or something I can put on physical media. How do we know how long the service will keep going? With hard-copy at least you can reinstall and use the last good version.) First, performance and features will have to exceed current desktop software in order to convince people to give up their local versions and move to a web-based solution. Some applications will be better at this than others - it's going to take a lot of convincing to get people onto the web-based word processors, I think, while something communicative like XBox Live seems to be a natural fit. Second, we need more broadband penetration. This goes hand-in-hand with performance. People need to be able to get to their application 24/7, and that means web access everywhere, for everyone with a PC/laptop. We're not even close to that.
Market is only going to get bigger. (Score:5, Interesting)
In 10 years' time, I doubt we'll use CDs or DVDs for much. I don't have a CD drive on my current laptop and I have only missed it once since my initial install -- and that was to install an older version of Quickbooks (newer versions are available for download instead of on a CD.) CD-ROM only drives are quickly becoming as obsolete as floppy drives as we move to the Internet for software, music, and movie distribution. As online storage and backup services take over, the idea of backing up to a CD-RW or DVD-RW will also become obsolete. We'll be able to "jack in" anywhere, from any PC/Mac/Internet cafe terminal, authenticate ourselves, and have instant access to all of our data. TurboTax, SalesForce.com and other services like it are just the beginning.
Re:This press relase brought to you by Salesforce. (Score:4, Interesting)
1) The open-source tool is cheaper. MUCH cheaper, as in $0.00 vs around $12,000 per year.
2) The open-source tool is not as good as Salesforce, but it does everything we need.
3) The open-source tool runs on our internal network, so it's faster and more reliable than Salesforce.
4) Although Salesforce has a pretty decent API for developing custom apps, nothing beats having the source.
5) Our data is OUR DATA, and we don't want lock-in.
3-Tier Architecture (Score:2, Interesting)
I believe what's needed, and may even be a good idea for a start-up, is DaaS or Data as a Service. Your data is securely (I hope) stored and backed up through a DaaS provider. Available to you and your SaaS provider 24/7.
Feel free to email me with ideas...
Re:Doubletalk (Score:4, Interesting)
1. The business climate is different
2. The ASPs tried to host apps that hadn't really been designed to run over the Net. The new generation is using apps that have been specifically been written with that in mind.
I'm not sure I believe the hype, but at least get the author's points right.
Re:This press relase brought to you by Salesforce. (Score:3, Interesting)
Long time example (Score:4, Interesting)
Every one of these application that I have had to deal with has been very difficult to use. My theory is that they sell the application to one of the bosses based on the way the reports look. They make the user interface for the reports work well. That helps two people per company and saves their time. The people who enter time get the short end of the stick and 200 people waste their time and energy trying to enter hours.
I mean
The first one I had to use only worked right if you used the "right" screen resolution. You were supposed to change your screen resolution to run their application. And, if you didn't, the windows would be too small. They wouldn't scroll. They wouldn't resize. And you couldn't see the OK button at the bottom.
Another one, two years later, would lose everything you entered if you tried to print it at the wrong time.
The one I am using now (in 2006 after 5 years of these sinister felons) makes you go through 5 screen clicks to add more than 40 hours. If you go in to enter your hours after 6 pm on Friday it will default to next week. The first time I didn't know it and entered and submitted all my hours on the wrong week.
I think the it shows the real problem with the business model. There is no incentive to improve the time usage for the people that do the work. The word comes down from on high because the sales doesn't have to convince more than a few people that use the application. This makes the choice of such software a burden on the company's bottom line because, by choosing it, they waste their employee's time.
time is money
Re:This press relase brought to you by Salesforce. (Score:4, Interesting)
We deployed it at 3.5.1 (about six months ago) and it has improved significantly since then. Overall I guess it's OK but still has a way to go, particularly on the documentation front. Reliability has been good in a kinda "we haven't lost any data" fashion. Performance is shoddy, but we're running it on a fairly slow box. Quicker than Salesforce though. The source is a bit scary and while there is a SOAP API the documentation (again) is shite.
BTW, you can export from Salesforce in any one of a dozen ways so I wouldn't get tense about that.
Sugar themselves are a bit weird. It took a while to be able to buy support queries ($95 a pop or $295 for five, IIRC), the organisation being set up a bit *too* focussed on upselling to Sugar pro or whatever it's called. They seem to be an organisation that learns, however, and hopefully people like me ringing up and trying to give them money for support queries will change their tune fairly quickly.
With any luck it turns into a big OSS success story.
Dave
Re:Oh goody! More buzzwords! (Score:3, Interesting)
You know, BMW buys a lot of parts they just put together. But they're still doing a pretty good job selling cars.
I'll take it a step further. Boeing. They outsource a lot of manufacturing. A hell of a lot. But what they don't outsource is the key part (the core) of the business. In Boeing's case, it's the wing. And you know what? Nobody was really concerned until Boeing outsourced the wing [buffalo.edu]. Building a PC but not building the wing is sort of like getting mad at Dell (or, say, IBM), for them not personally building the power supply, floppy drive, or screws holding the case together.
At some point, you need to outsource. You have to. But, like with all things, there's a sliver of white, a sliver of black, and a whole ton of gray in between.
If "no outsourcing, ever!" is anyone's war cry, then I guess Intel needs to build machines to dig for oil. Then they take that crude oil and process it in Intel refineries which convert it to Intel gasoline which is used to run Intel mining machinery to dig for raw metals which are then used in their Intel chips. Business, by definition, needs to outsource. At some point, you start with raw materials (whether they be rocks or PC components or data) and convert that into something useful that needs to be bought (flower pots, PCs, or trend reports and forecasts). It's that process conversion that adds that (buzzword alert) "Value Add" phrase that's so dreaded.
If all you're doing as a company or individual is having your secretary pass specs from one party to another, then I only have this for you: "I deal with the god damn customers so the engineers don't have to. I have people skills; I am good at dealing with people. Can't you understand that? What the hell is wrong with you people?"
Of course if you actually have some power or control over your organization (unlike our good friend Tom Smykowski) then the smart thing is to buy these suppliers that are doing so well, if you can. Do that with all your best outsourcers and... ta-da! you're a full company again.
Then ten years pass and the stagnation hits all the departments after a wave of bad managerial decisions, your good employees leave, your components suck because you've eliminated 50% of your R&D... What do you do now? Start the whole cycle again! Layoff, outsource, rebuy!
Isn't business fun?
Isn't it?
Re:Oh goody! More buzzwords! (Score:2, Interesting)
I work for a company that offers SAAS in the finance industry and I'd like to give you a different perspective on this matter.
What you say is not wrong. However, you sound like cost-cutting is the unique benefit/motivation of ASP/SAAS. It is important to note that focusing on the core competency is, in and of itself, a big advantage.
Imagine a CEO of mid-sized company, strugling to take his company to the next level, having to spend his time with the head of IT because of the various issues that arise naturally when you're managing your IT infra-structure. This CEO will not only save money by "outsourcing" the management of this application, but it will also have more time on his hands to work on the things he cares, which means he'll be more productive and make more money.
We were recently involved in a RFP and when the company checked the action items on their side, there were so many things "missing" (things we were going to take care of for them) that they thought there was something wrong.
We'll buy the hardware, we'll configure the application for them, we'll send them a link via email and they will download the application via Java WebStart and after a few weeks of data setup it's a GO!
And then, we'll make sure the application is running 24x7, we'll perform the database backups and all maintenance windows. Upgrades are now transparent (thanks to WebStart) and we have a 24x7 support hotline they can call at any time.
They will not have to pay any upfront fees. Instead, they pay a monthly subscription to use our system. They can get out of the contract whenever they want, which gives *ME* the incentive to provide a great service (otherwise I'll lose my job).
And when it's time to upgrade hardware, they will not have to worry about it. All they care is that the SLA is clear about how long certain tasks must take, when the environment needs to be up and running, and when certain reports should be available. And if don't hit the target we pay penalty fees (another incentive to make sure things run smoothly).
The customers (can) review our contingency plans before they start using the service if they want to make sure we can conform to their own standards. We have been audited by various consulting companies hired by potential/current clients and although sometimes they make a few recommendations (wich we usually take on board happily) we never had any problems with them.
One can say that an internal IT department can do exactly the same thing. However, from my experience, they do not have the incentives that we have. It's not their application that they are supporting and they can always point their fingers to the vendors. In the end, they don't take as much responsibility for the problems that come up.
SAAS/ASP (whatever you want to call it) *DOES* make sense not only because of the money you will save, but also because of the headaches you will no longer have.