Grid computing is a fairly all encompassing concept and as you probably know, can be generally defined as: "a system that uses open, general purpose protocols to federate distributed resources and to deliver nontrivial qualities of service." Or in other words, it uses standard "stuff" to make many distinct systems work together in a way that makes them useful.
Utility computing or on-demand computing is the idea of taking a set of resources (that may be in a grid) and providing them in a way in which they can be metered. This idea is much the same as we buy electricity or a common utility today. It usually involves a computing or storage virtualization strategy.
Cloud computing is a subset of grid computing (can include utility computing) and is the idea that computing (or storage) is done elsewhere or in the clouds. In this model many machines (Grid) are orchestrated to work together on a common problem. Resources are applied and managed by the cloud as needed. (In fact this is a key characteristic of cloud computing. If manual intervention is required for management or operations, then it probably doesn’t qualify as a cloud.) Cloud computing provides access to applications written using Web Services and run on these Cloud Services.
Now let’s add to this discussion the idea of Software as a Service (SaaS). Usually this means a model where diverse applications are hosted by a provider and users pay to use them. So I would say the key distinction of SaaS and cloud computing is the service and business model provided as opposed to the architectural mechanism used to deliver it. In fact, I think it is also fair to say that a cloud computing architecture may be the key/best mechanism for delivering Software as a Service. Let’s look at a couple of today’s trends and see if this all fits. Probably the best known examples are of course search and mail. There are several companies that offer both freely, they are available via the web, and they are written using web services. (There is a growing set of additional capabilities that are becoming available.) For the most part, these are all free (fee based versions exist). Based on the scale and ubiquitous service they are able to deliver, it is fair to say that there is a cloud behind them. The Amazon Elastic Compute Cloud is noteworthy here. It is a virtual farm, allowing folks to host and run "their" diverse applications on Amazon's web services platform. It represents an excellent example of a business model where a company is providing "Cloud Services" to those who can and are willing to take advantage of them. Software as a Service is the logical next step in evolution. It is going to be very interesting to see how this motion will emerge. Ideally users will be able to "rent" the application and everything needed to apply them to their business in the form of Software as a Service.
Wednesday, April 23, 2008
Friday, April 11, 2008
some predictions regarding SaaS
SaaS platforms and marketplaces will begin to proliferate, becoming a significant channel opportunity for vendors, as well as a key means by which users will gain access to SaaS solution capabilities. During the past several years, SaaS marketplaces and platforms have evolved well beyond their initial capabilities, offering customisation, integration, data pipes for BI or data sharing, data storage, content management, workflow, development tools and APIs. Ecosystems have formed to enrich the value of their offerings through the synergy of functionality brought together on these platforms. SaaS platforms now express a wide range of capabilities that are driven by the business model of the ecosystem and the needs and characteristics of the marketplaces they enable.
SaaS is becoming an international phenomenon, driven by both local demand as well as large multi-nationals who are adopting SaaS business solutions on a global basis. While US SaaS adoption is clearly going “mainstream”, Europe and Asia are only now beginning to experience the steep adoption ramp that the US has witnessed over the past two years. Europe is beginning to go through a very similar adoption profile that the US has – albeit with an 18 month lag. A very strong European growth can be anticipated for US-based SaaS giants aggressively expanding into this region as well as regional and country-specific players. Whereas average US market growth rates will likely slow into the 35-40 percent range in 2008, European market growth rates should exceed 60-70 percent next year.
SaaS merger & acquisition activity will explode. No doubt a serious feeding frenzy is about to unfold and it could be anticipated that a large number of venture-backed start-ups and emerging SaaS companies in the $5 million - $20 million range would be put up for sale over the next 12-18 months – and acquired by either SaaS pure-plays, ISVs hungry to enter the SaaS fray or on-shore & off-shore IT services and BPO providers who are eager to leverage a SaaS model. The upcoming year is an important one where next-generation horizontal and vertical franchises will be cemented.
Traditional on-premise application ISVs will earnestly begin to fight back. Approximately 15-20 percent of ISVs have already either begun new skunk works initiatives or gained access to SaaS assets and development experience through M&A activity. However, over the next 12-24 months, this number is anticipated to rise dramatically, as a tougher economic climate will only exacerbate an already challenged on-premise and traditional perpetual license model. To be successful, ISVs will need to fully understand the journey that they will be on across five key dimensions – economic, technological, operational, organisational and cultural – as well as take advantage of the many best practices available based on the hard-fought experience of early adopters.
SaaS development platforms will evolve and 2008 will see explosive growth in the adoption and use of SaaS-based software development platforms and services, beginning with significant growth in the use of vendor-specific, application-specific, and marketplace/ecosystem-specific development platforms and services. Wide availability of open, standardised tools and technologies in subscription-based, on-demand environments will help streamline and reduce the costs of software development and customisation. It will also foster use and growth of services-oriented architecture development strategies.
By 2012, 30 percent or more of all new business software will be deployed and delivered as SaaS. 15 percent of SaaS solution revenue will be accessed through SaaS marketplaces. At least 75 percent of the revenue generated by SaaS marketplaces will be driven by five or fewer SaaS platform providers.
By YE2008, greater than 55 percent of North American-based businesses will have deployed at least one SaaS application, with Western European close behind at greater than 40 percent.
60 percent or more of SaaS firms funded prior to 2005 will either be acquired or go out of business by 2010. By 2012, all bets are off as it concerns traditional on-premise licensing schemas.
By 2010, 40 percent of traditional on-premise application ISVs will bring to market SaaS solution offerings, either via acquisition, development of new single-instance multi-tenant applications, or through virtualised (multi-tenant) versions of their traditional on-premise offerings. Less than half of the ISVs in transition will actually succeed.
By YE2008, the number of user enterprises taking advantage of SaaS-based software development platforms, services and offerings will number in the tens of millions worldwide.
SaaS is becoming an international phenomenon, driven by both local demand as well as large multi-nationals who are adopting SaaS business solutions on a global basis. While US SaaS adoption is clearly going “mainstream”, Europe and Asia are only now beginning to experience the steep adoption ramp that the US has witnessed over the past two years. Europe is beginning to go through a very similar adoption profile that the US has – albeit with an 18 month lag. A very strong European growth can be anticipated for US-based SaaS giants aggressively expanding into this region as well as regional and country-specific players. Whereas average US market growth rates will likely slow into the 35-40 percent range in 2008, European market growth rates should exceed 60-70 percent next year.
SaaS merger & acquisition activity will explode. No doubt a serious feeding frenzy is about to unfold and it could be anticipated that a large number of venture-backed start-ups and emerging SaaS companies in the $5 million - $20 million range would be put up for sale over the next 12-18 months – and acquired by either SaaS pure-plays, ISVs hungry to enter the SaaS fray or on-shore & off-shore IT services and BPO providers who are eager to leverage a SaaS model. The upcoming year is an important one where next-generation horizontal and vertical franchises will be cemented.
Traditional on-premise application ISVs will earnestly begin to fight back. Approximately 15-20 percent of ISVs have already either begun new skunk works initiatives or gained access to SaaS assets and development experience through M&A activity. However, over the next 12-24 months, this number is anticipated to rise dramatically, as a tougher economic climate will only exacerbate an already challenged on-premise and traditional perpetual license model. To be successful, ISVs will need to fully understand the journey that they will be on across five key dimensions – economic, technological, operational, organisational and cultural – as well as take advantage of the many best practices available based on the hard-fought experience of early adopters.
SaaS development platforms will evolve and 2008 will see explosive growth in the adoption and use of SaaS-based software development platforms and services, beginning with significant growth in the use of vendor-specific, application-specific, and marketplace/ecosystem-specific development platforms and services. Wide availability of open, standardised tools and technologies in subscription-based, on-demand environments will help streamline and reduce the costs of software development and customisation. It will also foster use and growth of services-oriented architecture development strategies.
By 2012, 30 percent or more of all new business software will be deployed and delivered as SaaS. 15 percent of SaaS solution revenue will be accessed through SaaS marketplaces. At least 75 percent of the revenue generated by SaaS marketplaces will be driven by five or fewer SaaS platform providers.
By YE2008, greater than 55 percent of North American-based businesses will have deployed at least one SaaS application, with Western European close behind at greater than 40 percent.
60 percent or more of SaaS firms funded prior to 2005 will either be acquired or go out of business by 2010. By 2012, all bets are off as it concerns traditional on-premise licensing schemas.
By 2010, 40 percent of traditional on-premise application ISVs will bring to market SaaS solution offerings, either via acquisition, development of new single-instance multi-tenant applications, or through virtualised (multi-tenant) versions of their traditional on-premise offerings. Less than half of the ISVs in transition will actually succeed.
By YE2008, the number of user enterprises taking advantage of SaaS-based software development platforms, services and offerings will number in the tens of millions worldwide.
SaaS in federal govt
I recently attended a Software-as-a-Service (SaaS) conference hosted by Computerworld, in Santa Clara, CA. While I started out being skeptical as to how this might apply to the federal govt (there were a lot of representation by small to medium sized businesses) I left with the impression that SaaS, while still young, will grow considerably in the near future. Government has been a bit reserved in the adoption of SaaS. Security continues to be the major concern for government agencies. Ultimately, education regarding SaaS and multitenancy seems to be what is most needed to achieve a broader adoption. Items such as government employee attrition and constrained budgets are additional catalysts for future adoption. Many government IT leaders see SaaS as the conduit for true government-to-government collaboration with reduced operating costs and increased efficiencies due to reusability and intellectual property sharing between federal, state, and local agencies. In talking with folks from GAO and other agencies, this impression was confirmed. The govt is not really interested in owning software if it doesn't have to. For folks who are not familiar with SaaS, here are some overly simplistic definitions. ASP: Traditional COTS apps in a hosted environment. SOA: Any application that when broken down equates to services. SaaS: Essentially, SOA for hire; net centric software offered in a multitenant fashion.
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