Mathew Baldwin
Mathew Baldwin has been working within the hosted services space for the last ten years. In the past he has held roles as architect, senior systems engineer and regular troubleshooter, consultant for Microsoft-based platforms with multiple hosted services companies. He was instrumental in bringing t... (Read full bio)
Highest and Best Use, Movement Toward Grid and On-Demand SaaS
Lately, I’ve been thinking about highest and best use as it would apply to hosted services. I don’t think it’s any surprise or news to anyone that dedicated hosting may, over time, begin to shrink as grids and VPS become more popular and robust. With this in mind, the highest and best use for a company who has a dedicated offering would be to begin the movement of its dedicated hosts away from the physical server in the rack to a virtualized instance that runs across a grid that is shared by others. This allows the dedicated host to maximize the square footage of their datacenter, the power, and other resources, while still presenting that semblance of “dedicated” to the end customer. But, can we squeeze more density into that highest and best use? For many companies, the marketing spin around grid is a SaaS platform where you don’t really have to create a multi-tenant application; you can simply create a virtualized instance per tenant. Traditionally, you would have been buying a physical piece of equipment per customer, but now you can go with the grid and spread your customers across shared hardware. In my opinion, this is half the equation. The other half is to build a platform that sits atop a grid that provides on-demand SaaS capabilities, i.e. an ISV can publish their application into a shared virtualized instance. This maximizes the savings gained from moving away from a physical server per server role, but also maximizes that instance as being shared among multiple customers. Over time, hosts could decide to move their resources away from their traditional offerings into working on these new, next generation SaaS platforms.
What do you think?
Dassault Steps in SaaS 3D App Space
Dassault Systemes, a French firm that creates 3D and product lifecycle management software and services, has entered into the nascent SaaS 3D modeling space with their launch of 3DVIA, a platform Dassault suggests will transform the world into a place where someone can leverage the power of 3D to create, share, and experience life in 3D online. The downside to this announcement is that there really isn’t anything there yet aside from being able to upload pre-created models, i.e. the Apple iPhone; however, the potential is there for them to transform this into something quite interesting and equitable.
Once they launch an application that allows you to easily build 3D models, you’ll most likely start to see subscription packages for more advanced, professional features. I imagine that as they prove out their online strategy and scale out their internal systems to deal with usage load, we’ll see them bring their industrial applications into the SaaS model.
Add onto the above news with their announcement of a partnership with the advertising group Publicis to work jointly on 3D online marketing together. This new venture is going by the name of 3dswym (3DSee What You Mean). Combine that with the Microsoft partnership to bring 3D modeling capabilities to Virtual Earth and you can see the beginnings of a little ad-driven ecosystem where enough of Virtual Earth has been filled out that you can now walk through virtual landscapes of, say, Seattle where business owners can sell space on their walls or elsewhere all driven contextually off of the information Microsoft (or others) have collected about the visitor. And finally, the announcement of 3DLive available for Vista with some of the benefits being real-time 3D collaboration and 3D search and navigation. Will we see some of 3DS in Surface someday in the future?
Some interesting things I could see coming out of 3DVIA and the various partnerships are:
- Social Networks using more 3D models for avatars and other things.
- Richer online 3D worlds
- Distributed product-cycle collaboration.
- Easier monetization of ad-space within virtual worlds, such as Second Life or open source ones like Croquet or Uni-Verse.
- A partnership with Microsoft to provide in-game advertising over Xbox Live.
- XNA plug-in that allows you to pull in models built on the 3DVIA platform as MS hopefully embraces the hobbyist game-builder.
- 3D Flickr
Using rPath as a VPS Strategy
Over the past week, I've been looking through the various appliance projects hosted at rPath's rBuilder project site with an eye toward what could a hosting company borrow or participate in. rPath is a company that's building software that makes it easier to manage, deploy, and create applications that can be built as either virtualized or physical appliances.
Aside from the obvious, like the LAMP project, there are numerous appliances that fit into various vertical markets that many hosting companies are starting to enter. A company could grab a project and apply its own magic to it to fit it into its existing provisioning, control panel, and other infrastructure systems.
Another option is to utilize the pre-built virtual machines for a vertical VPS platform. The virtual machines are tuned for the application. The plans can be cheaper than the more generalized Linux VPS offerings. You could build a RIA that allows for seamless, integrated management of all applications to which an SMB could subscribe.
The beauty about the virtual machines is that some projects have VMs for a variety of systems: VMWare, Virtual Server, or Amazon. The last in the list is probably the most interesting. I could see a meta-hoster that simply builds an application that, when an order is received, grabs the latest Amazon image from the project source control and then provision it as a VM within EC2. Still, it might be pricey renting out an Amazon VM as a VPS offering.
Some of the projects worth watching, in my opinion, are those around Zimbra, SugarCRM, and Asterisk. These would make great additions to an on-demand platform that could be offered on cheap VPS plans or use the appliances for your shared platform and carve out tenants. Build on top of the three applications to create a nice, integrated platform, maybe the Linux equivalent of Unified Messaging (though I'm sure I.m missing some more in the list).
Traditional Web Hosts Move Upstream
With the announcement of Microsoft's SaaS Incubation program launching in North America, we'll start to see the traditional hosting companies begin to emulate what companies like OpSource have been doing for awhile. What I'm most interested in, is seeing how each of these platforms take shape and which host will be the first to begin moving down a path of on-demand SaaS application publishing into their environments. To an extent, this is a good opportunity for all of the participants in this program to come together and begin discussing how to make it easier and standard for an on-demand platform -- all the way from designers that a SaaS ISV can publish manifests through to define their "world" within the infrastructure to SDKs that allow SaaS ISVs to tie directly into a variety of services offered by the SaaS hosters.
I think it's important for these new SaaS hosting players to realize that bringing on an ISV is more than simply providing equipment and pipe. Those companies who believe that SaaS is simply a new moniker for offering dedicated servers are wrong. Just like web hosting, you need to provide a platform for these applications to sit in, on-behalf-of services to tie into, and a method of managing and publishing new applications or application updates into the environment -- these are only a few things a true on-demand SaaS platform needs.
Those companies that can work with each other to develop a standardized method of publishing applications into a hosting platform, bringing on-demand SaaS hosting into reality, will, I believe, help strengthen the overall SaaS industry as more and more ISVs look toward SaaS or S+S as the next evolution for their businesses.
SaaS Trust Relationships
In the past few months, I've been doing some due diligence on on-demand billing systems that I can tie into my evolving SaaS architecture. As I was doing this, I started to get a look into how responsive some of these companies were and how sales tactics change once you're through the door and it got me thinking about one thing: trust.
Most of us can agree that billing is probably one of the most important elements of any company offering a product -- I know it's the one that makes me the most nervous when I'm looking at providers who will handle billing for me in a SaaS model. The worst scenario any SaaS ISV can get into is to go with a billing solution that they either lose trust in or the company they've chosen begins to layer on extra costs that weren't outlined in the initial quote or promises at the initial sale are reneged upon once you're through the door.
This is probably why many companies in the past have either purchased an on-premise solution or have built their own. In the hosting world, many companies have brewed up their own solution to handle the type of billing models hosters have had to deal with, i.e. things like subscription and usage-based billing.
It would be nice to see some of the major vendors with solid, known names move into the on-demand billing space. I think this is also why I thought about the model Microsoft is using with their SaaS push, in particular MS CRM 4.0 ("Titan"). A company can start off with by going with Microsoft or with a partner who builds additional services on top of CRM, and then migrate into either a dedicated solution or an on-premise solution if they either grow large enough to warrant on-premise or lose faith/trust in the company managing their CRM platform. This creates a great continuum and I know it goes against the SaaS model of moving things to the web, but for some services, many companies will be nervous if they can't switch between SaaS and on-premises, especially when trust has been eroded.
On-demand companies that build a SaaS offering should consider how a customer would move their billing solution to on-premises or to a dedicated platform where they're not lumped in with a shared set of customers. A company that can successfully build a solution that can start hosted, then migrate to self-hosted will be further ahead, in my opinion, than those companies who strictly offer on-demand billing.
All I know is if I trust you with my revenue stream, then I need to have a method of moving the ability to bill for that revenue in-house if something happens that destroys my faith without forcing me into an expensive migration to another on-demand billing solution.
