February 26th, 2009
Another outage, another dashboard
From the I-told-you-so department. Finally, Google has followed a long line of leading SaaS and cloud providers trying to break into the enterprise market in introducing a status dashboard for Google Apps.
I called on Google to do this in August last year, warning that if the company didn’t do so, it would not only be bad for Google’s reputation but also for the rest of the industry:
“If it doesn’t take suitable action, the snowballing subscriber volumes of businesses that are signing up for Google Apps are going to get a poor introduction to SaaS, which is no good for Google and bad for the industry as a whole.”
So, yesterday there was a Gmail outage and today, guess what? Google rolls out a status dashboard it just happened to have waiting in the wings. Why oh why do providers always, always have to wait until after a damaging outage before they do this? Wait, didn’t I already say that exactly one year ago? Read the rest of this entry »
February 25th, 2009
Did privacy laws bring down Gmail yesterday?
I was idly scanning The Register’s write-up of yesterday’s Gmail outage in Europe when this explanation from Gmail reliability manager Acacio Cruz caught my eye:
“Unexpected side effects of some new code that tries to keep data geographically close to its owner caused another data centre in Europe to become overloaded, and that caused cascading problems from one data center to another. It took us about an hour to get it all back under control.”
Why is Google developing code to keep data ‘geographically close to its owner’? Europe’s privacy laws, is my guess. This is a topic I’ve been following over on The Connected Web, where I recently posted about a phenomenon I’ve called data protectionism: “One important obligation on any business operating within the EU is a continuing responsibility to ensure the security and privacy of data transferred elsewhere.” This week I followed up with news of a World Privacy Forum report that helpfully spells out all the implications for cloud providers and consumers.
Here’s how this ends up bringing down Gmail:
- Google successfully recruits several large European enterprises to Google Apps;
- Those businesses express concern about their data privacy obligations under EU law;
- Google’s engineers start developing algorithms to keep data from straying beyond certain geographic territories;
- Those algorithms behave unexpectedly during a routine upgrade;
- Gmail goes down.
I have no evidence for this chain of events apart from what Cruz wrote, but why else would Google want to keep data “geographically close to its owner”? In cloud computing terms, the notion is almost absurd — and of course absurdity is precisely the sort of thing that produces unexpected outcomes in any system.
Absurd though it may seem, the point is a crucial one for cloud providers to take on board. Their infrastructures are going to have to build in awareness of real-world jurisdictions so that providers and their customers can demonstrate compliance with undertakings on matters of national law such as data privacy, intellectual property rights and taxation. Shifting data across a national boundary during an outage can have serious legal repercussions, and the cloud has got to take that into account — but without falling over.
February 23rd, 2009
Coghead's demise highlights PaaS lock-out risk
The problem with PaaS, as Coghead’s customers are now discovering to their dismay, isn’t so much lock-in as lock-out. They knew they were locked-in to Coghead’s platform, but that’s nothing unusual in the world of software development. In exchange for the convenience built into a specific platform, developers willingly give up the freedom to move elsewhere. With conventional software, they know they run the risk of ending up on a dead-end platform that’s no longer supported because the vendor lost interest or went out of business (or in the case of open source, the platform simply falls out of favcr). But although that’s a disappointment, it’s not a disaster.
What’s different with PaaS is that you don’t always have the option of staying on. Coghead’s new owner SAP will impose a lock-out from April 30, leaving all its current customers suddenly in the impossible position of having around eight weeks to completely rewrite all their applications on an entirely new platform. It’s small comfort to know that your data’s accessible if all the automation you’ve built up to process it is about to disappear. I would be crushed right now if I had built any kind of functionality using Coghead (and I’ll be honest, I had been considering it). The long list of rival PaaS providers offering a new home for my application would be small consolation.
What this highlights is the lack of any standard for transferring not just data but application logic between such platforms. As Coghead’s erstwhile CEO Paul McNamara ruefully admitted to InformationWeek last week, “Customers can take the XML out that describes their application, but the reality is that only runs on Coghead, so customers will need to rewrite their app with something different.”
There’s never been a compelling need for this type of capability on conventional software platforms because there’s less urgency to move functionality elsewhere. With PaaS, the lack of such mechanisms could become a huge barrier to adoption as customers Read the rest of this entry »
February 18th, 2009
Weaving the real-time web into brick-and-mortar retail
When I walked into Circuit City in San Mateo last September to buy a Flip Mino pocket camcorder, the visit summed up the clash of the old and the new that retailers are facing in the digital age. The manufacturer’s website had referred the chain as a stockist, and my iPhone had helped me find my way to the nearest store. But I nearly walked out of there empty-handed because the assistant was having trouble finding the item on the shelves.
Circuit City has since gone out of business, along with a lengthening list of other familiar retail names. Another factor in many of these closures, according to one commentator writing about the demise of fitted kitchen and furniture chain MFI in the UK, is a focus on cost-cutting at the expense of staff skills and customer service. So long as consumers were flush with cash and almost limitless credit, retailers only had to open up shop and the takings would roll in. In today’s changed climate, I believe the retailers that have continued to invest in providing a good customer experience (provided they didn’t overextend their borrowings to do so) are the ones that will be best placed to survive.
Trouble is, the Web complicates the picture for retailers. For many purchases, consumers get a better customer experience from a well-automated website than they do from most retail stores. They can search easily, instantly see what’s in stock, look up product specifications and discover personalized suggestions and offers based on their browsing and buying history. Few retailers hook up their online presence to take advantage of the one clear benefit of a brick-and-mortar presence — the possibility for a consumer to drive a few blocks and pick up their purchase today — and the minority that do rarely manage to match the quality of the online customer experience with the service levels their staff are equipped to offer in store.
This is difficult enough for large retail chains — even those with deep pockets — but it’s a real challenge for the smaller retailers that often have the best record of personalized customer service in-store. How do they replicate that customer experience online without Read the rest of this entry »
February 11th, 2009
Sage shows why bigcos can't be trusted with SaaS
The first of my promised SaaS stories from Europe ends with an uplifting David-and-Goliath twist, but is first and foremost an object lesson in how not to introduce a SaaS offering, courtesy of one of the world’s leading small business software vendors, UK-based Sage. I know I ought to start with one of the many positive stories about SaaS in Europe, but I’m steamed up about this one, so here goes.
After a claimed 18 months in development, Sage at the turn of the year unveiled the beta of Sage Live, which combines a free-of-charge invoicing application and a simple £10-per-month accounting product for small business owners. Although to my mind I found it a bit too simple from an accounting point of view (no multi-currency support for example), it has some interesting Web 2.0 features such as integration with Google Docs and Google Calendar, keyword search across the application, support for RSS feeds in the dashboard and a Blackberry mobile client. Online accountancy watchers Ben Kepes and fellow-Enterprise Irregular Dennis Howlett both gave it positive reviews, while noting that this was a beta release and Sage was keen to listen to feedback and evolve the product.
But two weeks ago, Sage Live went dead after serious security flaws were exposed in the product, leading the company to shut down the beta trial. This is where the David-and-Goliath angle comes in. The flaws were exposed by the blogging founder of a tiny SaaS rival to Sage. Duane Jackson, CEO of UK-based KashFlow, which just last week celebrated passing the 2,500 customer mark, decided to have a detailed look at his rival’s offering and immediately blogged about what he discovered:
“Almost unbelievably, [Sage Live] show[s] your password on-screen when you log-in — in plain text. It’s sent to [Sage's] central ‘passport’ service using a GET rather than a POST — so your password is actually in the requested URL which is displayed in the status bar … Make sure no-one is looking at your screen when you log in …
“A little bit of prodding around the site and I found myself looking at … pages that only authorised people should be seeing.”
Russ McRee, a security analyst with Microsoft Online Services and (via his personal blog) a deadly scourge of flawed SaaS security practices, found additional problems and reported them to Sage, as did many others over the following days. A week after Jackson posted his findings, Sage took the service completely offline and it has not yet been restored.
I’m not privy to what went on within Sage during the development and unveiling of its new offering, but it seems clear that Read the rest of this entry »
February 9th, 2009
Cloud and the European SaaS provider
I’ve been spending some time recently researching the SaaS scene in Europe, while preparing the ground for the SIIA OnDemand Europe conference in June, for which I’m helping to co-ordinate the agenda [as a paid engagement: see disclosure]. Although most of the well-known names in the SaaS business are US companies, there’s a strong contingent of European SaaS vendors and they deserve more attention — in fact I hope the June conference will be a big showplace for them. So over the next few weeks I’m going to be highlighting one or two specifically European stories here on this blog.
One key theme is the interaction of SaaS and the cloud, which is the topic of a pre-conference seminar hosted jointly by the SIIA and IBM next Wednesday 18th February in London, called Cloud and the SaaS Provider. Europe has a lot of cloud pioneers — Q-Layer, which Sun recently acquired, is based in Belgium; there’s a strong Amazon presence here, along with competitors such as Flexiscale and ElasticHosts, and cloud management vendor CohesiveFT, whose co-founder Alexis Richardson is speaking at the seminar, has an important base here. Last week I met many of these vendors at the PoweredByCloud conference, and they’ll all be making an appearance at next month’s Cloud Camp London (which I’ll miss as I’ll be in San Francisco that week for SaaS Summit 2009).
Next Wednesday’s half-day seminar is the first event that looks at cloud from a specifically SaaS ISV perspective, covering issues such as: what factors to consider when moving to cloud infrastructure; how to evaluate the costs and risks of competing cloud platform; as well as the business impact of moving to the cloud. There will be speakers from ISVs who’ve made the move, including CODA, which last year launched the first financials application developed on the Force.com platform. There will also be speakers from IBM, BT and Microsoft, and participants from Salesforce.com, OpSource and other providers.
My own view is that the downturn is going to force many ISVs to turn to cloud infrastructure to enable their SaaS initiatives, so I’m going to be interested to see what the general feeling is about moving to the cloud. From what I’ve seen, European vendors are not holding back any more than US vendors, and there are plenty of indigenous providers and cloud experts, so this may be one technology that gets adopted just as fast in Europe as in the US.
For those interested, the seminar is free to SIIA members and IBM or Progress Software partners, and other participants will have the registration fee credited if they go on to register for the June conference, which is shaping up to be a strong event (even though I say it myself), with keynotes from NetSuite’s Zach Nelson and SAP’s John Wookey as well as Google and many other key players on the agenda.
February 7th, 2009
What have we done?
What have we come to when a respected VC feels no shame or embarrassment when actually publishing a blog post entitled When Talking About Business Models, Remember That Profits Equal Revenues Minus Costs, as Fred Wilson did last weekend? Has the world become so blind to the basics of commerce that it needs reminding of such a basic tenet?
Apparently yes. Even Wall St can’t count, as Robert Cringely revealed last week. (An analyst at JP Morgan came up with a graphic to illustrate the extent to which bank market caps shrank in 2008. It was widely circulated in financial circles without anyone noticing the elementary error in basic geometry which meant it massively overstated the shrinkage).
Fred Wilson’s blog post cited Chris Anderson’s WSJ article of last week on The Economics of Giving It Away, which, he notes, “suggest[s] that Internet entrepreneurs are going to have to get people to step up and pay for something instead of just giving everything away for free …” Really? Is such a concept so novel?
Have we brought up an entire generation to believe that cash isn’t important? Is this the payback for all those millions of dollars spent educating a multitude of MBAs? It turns out it was all a waste of money, because all it’s done is encourage the hubris that this generation is so smart it can defy the rules of economics (as well as remain oblivious to the tenets of geometry). For a few years there, Read the rest of this entry »
January 30th, 2009
SaaS is surging in the downturn, says IDC
Market researcher IDC has published an upward revision to its market size projections for SaaS in 2009. At a time when most industries and economies around the world are slashing their growth forecasts into single digits or even negative territory, IDC now expects SaaS growth to surge by more than 40 percent in the current year. That’s a significant move up from its previous forecast of 36% growth, published back in July when most economists were still trying to deny the onset of recession.
SaaS’s counter-cyclical boom is entirely due to the enhanced attractions of the model when times are bad, says IDC:
“… the harsh economic climate will actually accelerate the growth prospects for the software as a service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications. Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams.”
Don’t you just love that definition of SaaS? “Right-sized, zero-CAPEX alternatives to on-premise.” The report’s author, director of on-demand and SaaS research Robert Mahowald, adds an interesting observation that bears out the uprating:
“… several key vendors finished the year very strong, reporting stable financials and inroads into new customer-sets.”
From my own conversations with privately held SaaS players, I can certainly confirm that business seems to be expanding with continued momentum. Yesterday I was Read the rest of this entry »
January 28th, 2009
Google adds offline and 'flaky' modes to Gmail
Traveling through the French countryside at up to 186 mph, the Eurostar high-speed train service is a great place to put Google’s new offline Gmail service (announcement, Techmeme) through its paces. Connection via a 3G card (there’s no wifi on the train) is bound to be intermittent at best. But it works, says Dave Armstrong, head of marketing, Google Enterprise EMEA, who like 20,000 other Googlers has been testing the new feature for the past couple months.
Although the majority of the blogosphere comment this morning remarks that “finally” Gmail has an offline mode for disconnected working (albeit only in a Labs version for now), I’d say the delay is more than compensated by an innovation that Google’s developers have named “Flaky connection mode”, for those times when you’re connected intermittently. That’s the mode Armstrong was putting to the test on his recent Eurostar trip. In ‘flaky’ mode, the client connects when it can, but in the meantime the user keeps on working even when it can’t.
Flaky mode works with whatever data the Gmail client has downloaded at the time. So if you find yourself unexpectedly disconnected without invoking offline mode, you can enter flaky mode and carry on while awaiting a reconnection. Of course you must already have enabled the offline capability, which downloads your historical data — you can decide how far back to go.
This solves a problem that to my mind is much bigger than totally disconnected working, as I outlined a couple of years back when discussing the topic of offline users:
“The key point at issue here is that intermittent disconnection is an inherent fact of life in a network environment, and that a truly robust on-demand application design will accommodate disconnection in a transparent and non-disruptive manner.”
People talk about utility computing as if it automatically implies ‘always on’ networking. But if computing today really were only as pervasive as electricity, we’d be far worse off than we are with all our wireless access to live connectivity. Even so, we still need to cache that connectivity from time to time, just as we store electricity in a battery to tide us over until our next charge. This is what Google has achieved in its “flaky connection” mode.
“There’s a very real need [for offline working] for those traveling on planes and trains,” Armstrong admitted (not to mention conference rooms buried deep in hotel basements, I would add), as well as Read the rest of this entry »
January 27th, 2009
Oracle puts a price on single-tenancy
Oracle today announced a new centrally managed single-tenancy option for its SaaS CRM OnDemand application, along with various other features including unlimited custom objects. Existing prices remain the same, at $70 per user per month for the multi-tenant version and $125 per user per month for the previously available single-tenant enterprise version, which is a completely independent instance for which the customer can dictate its own upgrade and patch schedules.
The new ’standard’ single-tenancy option comes in at $90 per user per month. It’s still a dedicated server but, unlike the ‘enterprise’ option, Oracle decides when it gets patched and upgraded. “You can get your own stack of the application but we’ll still manage it and maintain it on our standard schedules,” Oracle’s SVP of CRM OnDemand Anthony Lye (pictured) explained to me in a briefing late last week.
What’s the benefit? Lye says that it’s having single-tenant instances of each component of the application stack, including the database, enabling benefits such as custom performance tuning. He calls this option a ’sweet spot’, perhaps reckoning that most customers will be happy to stump up this small extra delta to have a server (even if only a virtual one) that they can call their own.
What I found interesting is the way Oracle has effectively put a price-tag on single-tenancy, all other things being equal in terms of shared management and data center infrastructure — and it’s set it at $20 per user per month. Assuming Oracle is operating on the same gross margins as Salesforce.com, Read the rest of this entry »
Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
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