 Tuesday, March 29, 2005
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Phil Wainewright has another thought-provoking post:
The problem I have with talking about 'software-as-a-service' and 'on-demand software' is that these phrases continue to give the impression that the model is all about delivering software, with the underlying implication that all that's changed is the delivery mechanism. In truth, the transformation is far more fundamental than that. The most important point to bear in mind about these net-native, on-demand ISVs is that they own and operate the software themselves. They take responsibility for making sure it's up and running before the customer starts using it. What the customer pays for is not the software itself, but the working functionality the software provides.
Unfortunately, the clarity behind this interesting article becomes clouded with an anti-Microsoft rant...yeah, yeah.
I do wish Phil had pursued the point a little further however. Whenever I've talked to SaaS (ASP we used to call them) customers invariably I find that as they grow increasingly dependent on the service they want to more tightly integrate it with their inhouse business applications. That's a problem, of course: if the ASP and not you dictates data formats, service levels, and so forth, then you don't control your software. Most now have XML/SOAP interfaces and while this helps in rationalizing syntax, if the semantics are different, then the problem can be intractable. And certainly there are performance issues: it's difficult to bulk load a customer database via SOAP over the Internet, for example.
To me this is the great challenge of the SaaS/ASP: how do you appear local, an integral part of the customer's computing ecosystem, and still generalize enough to have a global value proposition.
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