chris horn's blog

It is an interesting time for the world of “Software As A Service”.

At some sort of cerebral level, Dell has been an inspiration for those contemplating a SaaS go-to-market strategy. Dell was renowned in the PC industry for largely avoiding the cost of enterprise sales and retail distribution channels, by instead connecting directly to end purchasers – whether domestic, small/medium business, or enterprise – as much as possible. It is very interesting thus that last week Dell announced, for the first time in 15 years, a retail deal: this time, with Wal-Mart to put some of its low end products directly onto the retailer’s shelves, as its “first step” into a retail channel. Dell apparently needs a distribution platform – and a retailer which 90% of American shoppers use is more attractive than most other retailers – through which to advertise some of its products.

Also this week, Ray Ozzie of Microsoft has stated that it is no longer about “Software As A Service” but “Software And A Service”! He was speaking at the Mix07 developers conference, and primarily promoting the Silverlight technology for Rich Internet Applications. Silverlight will be a runtime for .NET in various browsers – IE, Firefox and Safari – and compete with Flash, AJAX and Javascript to – in Microsoft’s view – provide a much richer video and interactive graphics experience for end users. Ozzie noted that (“fat”) client software not only supports offline usage, but also offers “privacy, empowerment, anonymity and freedom” compared to the “monitoring, auditing and creepy behaviour” of some online services. I guess this was a swipe in particular at Eric Schmidt at Google who is currently promoting substantially enhanced search experiences for end-users, albeit with the consequence of maintaining (private) information about each user.

An interesting part of Ozzie’s presentation was his announcement that Microsoft Live is offering a Silverlight Streaming service providing 4Gbytes of free storage per Silverlight developer, so as to encourage the development and hosting of Silverlight applications. So, if you are a S(as/and)aS developer or independent software vendor (ISV), Microsoft is potentially offering you a rapid way to scale up to address a massive online audience, based on MSN and now not just IE but other browsers as well: up to 1 million unique end users can access your application for free (above that, its 25c per unique user). It will be interesting to see how Google responds..

IMHO we will continue to see a mix of pure software-as-a-service applications (with thin clients); online services with companion client applications (including rich internet access), and fat clients accessing remote services from time to time. There will continue to be a spectrum of configurations.

Regardless, I believe that a critical aspect of S(as/and)aS applications is the ability to scale self-service. Whether you use Silverlight Streaming, Google, Salesforce.com’s Apex or even Wal-Mart (as Dell is doing) to reach a potential audience of millions, I believe that a S(as/and)aS application will be unsuccessful if scaling of its adoption requires manual intervention for every transaction.

Self-service is key to S(as/and)aS – whilst at the same time ensuring that the customer’s experience is happy and helpful. Dell’s appearance in Wal-Mart may in part be due to reports of poor customer service with a purely online self-service store.

One example of online software self-service is of course the open source community. What could be more self-service than downloading source code, and playing and building it yourself ? A common open source business model is to extend self-service with technical support and training. But in turn, this customer support will best be implemented by at least some degree of self-service: witness IONA’s various support offerings for its Celtix family of open source products, including a self-service knowledge base alongside telephone and email support.

LeCayla’s self-service philosophy goes further. In providing SaaS metering and billing, LeCayla’s technology has to address two audiences. The first is end-users of SaaS offerings: LeCayla measures usage, and generates bills and invoices according to actual usage, and in accordance with specific business rules defined by a particular SaaS ISV or application software provider. Naturally, it is desirable that each end-user may use a self-service interface: eg to check her usage, or to change billing information such as a credit card number.

The second audience for LeCayla is the ISVs who want to use LeCayla to meter and bill for use of their software products. Each such ISV registers business rules (eg pricing information, usage tiers, etc) into LeCayla. Furthermore, each such ISV may wish to subsequently change its own business rules at any time – for example for a pricing promotion of a particular product within a particular geography. Naturally it is desirable that not only should end-users have self service to their own usage and billing information; but also that each ISV should also likewise have self-service to its own business rules, as well as to its market adoption metrics and usage information.

For Cloudsmith – the third software company in which I am involved – self-service is also key. As I noted in a previous posting, “sometimes creative developers have different configurations that they seek, or want to define, share and publish to the world. Can interesting new virtual distributions be rapidly defined, communicated and materialized ?”. Cloudsmith will enable developers to self-service find and use interesting software configurations, each frequently materialised from different software repositories (and sometimes using widely different repository technologies and build/make systems). Equally, publishing a new configuration, either to the entire world or to a private community of collaborating developers, will be a self-service activity.

Self-service seems to be intrinsic to scaling software services offered over the internet. Self-serviced services must naturally be scaleable: poor customer support and dissatisfaction will otherwise result. In a self-service, service oriented world, multiple business models are IMHO possible: for example, free access with optional paid-for support and consultancy (IONA’s approach with Celtix as per above); metered usage (LeCayla’s approach); or community based (Cloudsmith’s). I believe that scalable self-service underpins any viable service oriented business model.

Not all S(and/as)aS transactions should be self-service. But unless your S(and/as)aS business model facilitates self-service, then you may be scaleably challenged!