There was a press release in the "media" room here announcing a new project from Parallels the company is calling its "SaaS FastTrack" program.

I'll admit - it was a bit of an unusual experience trying to digest a press release in print. Fortunately I had a chance to sit down with Serguei Beloussov, who explained to me some of the significance around the program.

The basic premise is a system for helping independent software vendors build their applications to function with Parallels' Open Platform and Application Packaging Standard, both designed by the company to function as an open and ubiquitous standard for communication between the various application and infrastructure pieces of a hosted solution.

It's really a more focused effort at what the company was already doing - helping ISVs to build solutions that can be easily adopted by hosting providers, which are the bulk of the company's customers.

The interesting thing about the program, he says, is that there's no immediate and obvious financial benefit to Parallels from the ISVs that build their solutions to function with the APS. The benefit to Parallels is in the ecosystem it is building - an environment where Parallels software is the simplest way to package hosting solutions. If the hosting providers using that software grow, and deploy more servers, that is where the benefit is for Parallels.

As far as the nuts and bolts of the program, there is a "standard level," for ISVs with one application, which will provide the partner with assistance packaging the application and making it visible. The "premium" level is for ISVs with one or more apps and want "rapid time-to-market" with promotions and connections to executives in the service provider channel. The "ultimate" level is for ISVs that are new to SaaS, want to learn about the service provider industry and about service provider business models.

These aren't exactly inexpensive offerings, ranging in price from about $1,000 for the standard to about $10,000 for the ultimate. But it seems to be a very deep engagement. The full, exhaustive description of the FastTrack program is available on the company's website.

I think the other really interesting thing about the FastTrack program is how strongly it reaffirms Parallels' vision for the distribution of SaaS applications. Unlike, say, Microsoft with its SaaS Incubator program (which, though a little bit similar, really is a completely different thing), the Parallels program is really based on the belief that the software developer should make its application available to service providers, who will then deliver the service to their customers, rather than the ISV finding a host for itself and then providing the service.

They're just different areas of expertise. Software developers know how to develop software, while service providers really know how to provide service. It's right there in their names.

Probably the last of my notes from ISPCON fall 2007 here. Playing a little catch-up, but I’m just about caught up at this point.

 

One of the most interesting things I witnessed at ISPCON was (WHIR blogger and columnist) David Snead’s 8:45 a.m. Wednesday presentation “Negotiating the SaaS Minefield.”

 

We’ve mostly all been exposed to the SaaS hype, I’d imagine, by this point. It seems like the issue about which hosting providers and their suppliers are most uniformly excited. That is, except for David Snead, who sometimes seems like the lone dissenting voice in the chorus of folks talking up the technology.

 

It’s not that he’s saying “SaaS is bad.” It’s really more like “hey, wait a second now.” But it’s unique enough to make his opinion especially noticeable, especially in the format of a conference agenda, where much of the material is outright promotional.

 

David’s particular message regarding SaaS is nothing new to the WHIR – he’s been providing us with content on the subject for quite some time. And needless to say, I’ve read everything David’s written for the WHIR. But that (perhaps surprisingly) took nothing away from his presentation, which was a very informative and engaging lesson in liability as it could apply to a Web host’s SaaS efforts.

 

In fact, I don’t think I saw as many questions in any other session, and it wasn’t exactly a packed house for this pre-9:00 a.m. event. 

 

 

His premise: Web hosting itself is technically a “hosted service.” But for the sort of simple “ping, power and pipe” configuration that some hosts provide, it is very easy to do a risk assessment.

 

Foundational to the discussion is the Communications Decency Act, which, while partially overturned, continues to dictate that if you provide computer access by multiple users, you’re not liable for the data you process, because you do not manipulate the data. Therefore a dial-up provider, for instance, has no liability should a customer watch a copyright infringing YouTube clip.

 

When you begin to work in SaaS, you begin to manipulate data, and accrue liability. A risk assessment becomes more difficult.

 

Adding complexity to services adds liability to those relationships. And that liability should be negotiated in the service contracts, both between service providers and their customers and between service providers and their vendors.

 

Terms of service contracts in the typical hosting model are virtually standardized. That is, companies are comfortable enough in their risk assessments that they’re willing to use standardized terms of service (sometimes borrowing existing ones, often from Rackspace, in David’s experience).

 

In the SaaS model, nothing is standardized, and companies may be taking on more liability than they realize in offering these services. More complex contracts are required.

 

One specific piece of advice he offered was that SaaS application providers should have written contracts that actually have customers indicate their written consent.

 

The expanding of context goes upwards, too. Renegotiating vendor deals is critical too. It’s key, he says, that your vendors have “skin in the game.” Don’t accept their first offer of accountability, and make sure they provide SLAs with compensation when they’re not met, and indemnify you when their products don’t work.

 

Most of this work is, obviously, something you’re going to need a legal advisor to do for you: drafting your terms of service, negotiating your vendor contracts.

 

Another thing that can help protect your business against failures in outsourced services is insurance. Your insurance company has special considerations for Internet businesses, but it may not be aware you’re in the Internet business. Make sure that’s the case.

 

So the title may have been ever so slightly misleading. David Snead’s SaaS message isn’t all “doom and gloom.” But he is acutely aware of the fact that service providers don’t always consider all the legal repercussions of incorporating solutions into their services.

 

Really, he’s all positivity.

 

Attended the morning session “Strategies for Growing your Hosted Business” yesterday, delivered by Ravi Agarwal, CEO of groupSPARK and Rich Bader, president and CEO of EasyStreet Online Services. 

 

 

The presentation offered hosted Exchange as one such “strategy for growing your hosted business” – unsurprising given the involvement of groupSPARK, which provides a private-label platform for selling hosted services such as Microsoft’s Exhange, SharePoint and CRM.

 

Rich’s part of the presentation included some interesting insight on the process of selling hosted Exchange – EasyStreet is, among other things, a groupSPARK reseller. The company, he says, focuses a lot of its work on grassroots efforts, making itself known through posting in forums. EasyStreet employs a blogger who focuses on small business issues and has developed a following of small business readers.

 

He pointed out that the small business market is a business that deals specifically with relationships, and that those relationships with vendors are what convince small businesses to make purchases, with the exception of particularly low-value services.

 

Ravi’s contribution seemed a bit like the typical groupSPARK boilerplate. Admittedly I haven’t seen this particular presentation before – it’s just a feeling I got. The information had a lot to do with the value of a private label hosted exchange, a point I would have assumed groupSPARK had long since made. I know I’ve heard a similar (or identical) argument at almost every event I’ve been to in the last few years.

 

That, perhaps, was the most interesting aspect of the presentation for me – I wanted to know what the objective of the session was (for Ravi, in particular). Is he preaching to the choir? Are these attendees who actually haven’t heard the case for SaaS before? Or are they willingly submitting to being won over through repetition?

 

 

Fortunately, I had the opportunity to sit down with Ravi shortly after the presentation. He said it was a combination of a couple of those factors. Regardless of how often some of us may have heard that message, he says, some folks are hearing it for the first time. On the other hand, some people are in the process of making a decision about whether hosted private-label applications are something they want to involve in their business.

 

What’s more, he says, he makes contact with a few prospective (or eventual) customers after every one of these presentations. In fact, he met Rich at an ISPCON event two years ago.

 

It seems like the SaaS message still needs a bit of a push, even at the very basic level. It certainly answers a question that’s been nagging at me for a while.

Hosting software provider SWsoft began its Global Hosting Partner Summit today, May 8, kicking things off with an introductory keynote presentation by CEO Serguei Beloussov.

In a continuation, and reiteration, of a message I've seen delivered at recent industry events, Beloussov expressed his feeling that the immediate future of the hosting market is tied to the software as a service delivery model.

In fact, he said, SWsoft is so committed to the SaaS model that the subject will dominate the content of the event of which we are currently in attendance.

Rather than repeat a point I've communicated here, and elsewhere, I'll boil the SWsoft SaaS message down to a few sentences:

The company believes it is the main opportunity for hosting providers to grow their revenue. By 2011 (according to a familiar looking PowerPoint slide), SWsoft believes that Web hosting providers will have to have built in support for SaaS.

SWsoft is developing for SaaS. And the model is relevant to almost every aspect of the company's platform. Automation and virtualization, in particular, have specific relevance to the model.

Web hosts, says Beloussov, are "the ideal channel" for SaaS.

He made a very interesting point while discussing the big players - Google and Microsoft - inescapable when discussing the hosted application market:

As far as the popular media is concerned, he says, Microsoft is regularly portrayed as an "evil" company (a notion that may have mostly to do with the years-old open source debate and operating system monopoly/fair-play concerns), while Google is regularly portrayed as a "good" company (probably the result of some good decisions and a genuinely conscientious corporate culture).

But with regard to the service provider market in general, and the SaaS market in particular, the reality is actually the opposite of this popularly held perception. Google, he says, is jealous about its businesses. It doesn't want anybody else making money in the markets it chooses to pursue. Microsoft's business is built around partners - when Microsoft's partners (hosting providers) make money, Microsoft makes money.

MORE: Keep checking back for more presentations by SWsoft, as well as notes from Microsoft, IDC and others. And there may be something worth reporting from tonight's event at the "ESPN Zone"

ALSO: Check back shortly for a fabulous photographic update to this post (UPDATE - PICTURES ADDED).

TAGS: swsoft, SaaS

We just sent the May 2007 issue of WHIR magazine off to the printer, which is good news, because we're just about out of midnight oil around here (it having been all burned up, you see).

It should be arriving in mailboxes starting the week of May 21, but I thought I'd offer a little advanced notice on what to expect from what I happen to think is a very timely issue.

If you're not a subscriber, incidentally, you could become one via a fairly simple and free-of-charge process here.

For about a year now, we in the Web hosting business have been experiencing the impassioned discussion surrounding the subjects of Web 2.0 and software as a service. These terms, we are told, describe the future of the business - a world in which applications have moved from the desktop to the Internet, and information is passed seamlessly between them.

You have every reason to believe this is true. Whether the "future" is two years away, or five, the companies designing the platform for hosting are determined that the term "hosting" will come to describe application hosting.

Now is the time for you to figure out how your business fits into that environment. And it's appropriate that I feel that way, because it's exactly the subject we cover in our "Building Blocks" issue.

The term Web 2.0 is used to describe the user's experience relative to the new system of applications available via the Web, which can be pulled together to create an Internet experience, and a presence on the Internet. This has, to an extent, reduced the appetite for Web hosting as it was once understood. In a feature on the new Web 2.0 ecosystem, Wayne Epperson helps to define the hosting company's role in this new environment.

SaaS, on the other hand, describes the service delivery side. The term is associated with hosted applications for business - the market where analysts see the real revenue potential for service providers. Dennis McCafferty contributes a feature on how hosts can best go about building the platform for delivering those hosted applications.

For hosts looking to make that first step into the hosted application market, Esther M Bauer describes the potential of hosted Microsoft Exchange, an easily understood, and universally needed business tool with a built-in audience and a vast support network. It's sort of the closest thing to a no-brainer in the hosted application business.

Keep an eye on the mailbox for the latest issue of WHIR magazine. My hope is that, after reading through it, you'll have a better sense of where your business stands with regard to the Web's emerging ecosystem.

ALSO: I understand I've already occupied one of your eyes with the previous paragraph, but if I might humbly recommend a target for the other one, I'd suggest you keep it on this blog for updates from the SWsoft Global Hosting Partner Summit, which begins today in Washington.

TAGS: whir magazine, Web 2.0, SaaS