WebProNews » SaaS

Google Apologizes For Gmail Outage

WebProNews Staff — Tue, 12 Aug 2008 11:49:12 +0000

A two-hour blip in Gmail’s availability spurred a rush of complaints both in and out of Google before the problem received a fix.

In a perfect world of software as a service, downtime exists as a curious idea, something people hear about but never actually see. The world is not perfect, and neither is SaaS, as users of Gmail discovered yesterday.

The service suffered an outage of a couple of hours on Monday as Google worked on fixing a balky contacts system. While some people could get in and read messages using the flat HTML interface, it only worked intermittently as some posters on Reddit noted.

Google came clean about the problem in a later post to the Gmail blog. Todd Jackson, Gmail Product Manager, wrote that they found the source of the problem, fixed it, and embarked on a search for other potential gotchas in the system.

“We don’t usually post about problems like this on our blog, but we wanted to make an exception in this case since so many people were impacted,” he said.

Jackson’s advice to people to hit resources like Google Groups or Gmail’s help center made little impression on Googling Google, where Garett Rogers pointed out the failings of this type of customer support.

“If this was truly limited to a ‘subset’ of users, and it happened to be affecting the Google Apps account your business uses to provide email to employees, what good is a simple user group?” he asked.

Situations like these bring back memories of early client/server applications, their failings, and the shift to the desktop PC model. The future may be in SaaS, but the problems it can suffer have been around for decades.

Enterprise Software Up Google’s Alley?

Mike Moran — Fri, 14 Mar 2008 21:04:23 +0000

Google is the king of advertising, and it’s made moves toward productivity software, with Gmail and Google Docs. But what about enterprise software, the stuff that powers businesses, even large ones? Does Google harbor ambitions to be an enterprise software player? I’ve recently taken a look at Google’s strategy and Google’s supreme motivation to own the moment of purchase. Let’s look at how Google might step up to the plate in the big leagues of software.

Google has already taken some baby steps into enterprise software, licensing Gmail for businesses and selling the Google Search Appliance to power Web site search. But what if Google wanted to do something big?

Google is not considered a player in enterprise software—marketers will tell you that it doesn’t have "permission" to sell into most enterprises. What they mean is that Google’s brand reputation does not carry the kind of customer service that most businesses expect. Most companies don’t think Google understands how to keep their business running. They don’t think Google understands how to create a software package that can be easy to run in their environment. The Google Search Appliance, where you buy the hardware from Google to run the software, is seemingly evidence of this point.

But enterprise software competitors should not take much solace in this state of affairs, because the software business is changing.

Just a few years ago, it would be a hysterical claim that businesses would even consider buying an appliance. Or would be happy to use Gmail—a system that runs completely outside its corporate firewall. Even today, few businesses make those choices, but that number does increase each year.

Both appliances and Software as a Service (SaaS) are trends that are taking root because enterprise software is sometimes costly and hard to use. Every enterprise software vendor is developing its capabilities in these areas. My company, IBM, has unique strengths to pursue SaaS because it has experience in both software and services businesses, but some enterprise software vendors are understandably wary about their abilities to compete with companies like salesforce.com (who sells a sales force automation service) and Amazon (who sells an e-Commerce service).

So what about Google? Google would likely have the brand permission to sell a service to the enterprise. It has the chops to scale its services to any level without breakage. No customer would doubt Google’s ability to keep a service up and running. But enterprises might still wonder whether Google has the business perspective to provide support to make it work no matter what. Enterprises might still balk at paying Google each month for a service for which support is an unknown.

How could Google address those issues? Well, they could work to create an organization (either through acquisition or organically) that convinces customers that they will service what they sell and keep the business running. That might require a real culture change within Google and would likely take time.

There are two easier ways to win this brand permission, both of which fit far more easily into the Google culture:

Make it easy. A lot of the support required for enterprise software have to do with how difficult it is to integrate software into existing environments, and how hard it is to customize software to unique needs of the very largest companies, and how difficult software can be to use sometimes. SaaS can eliminate most integration problems, and Google could decide to avoid the very high end customization market completely, while providing simple user interfaces for simple tasks. You can see them taking this approach with the Google Search Appliance—it does not match the capabilities of other enterprise search engines, but it is easier than many to install and use (in part because it does less).

Make it free. A lot of resistance fades away if you sell something for everyone’s favorite price. You can see Google taking this approach with Google Analytics and Google Website Optimizer, powerful tools that are not at the top in functionality, but are at the bottom in price.

But how could Google afford to make it free? Its leadership in advertising could be the answer. We are used to accepting advertising in our Gmail accounts in return for free personal e-mail. Could businesses decide to make the same trade-off for enterprise software if presented the chance?

But it’s more than advertising that Google wants—they want access to information about people’s interests, so they can personalize the advertising. Google follows this model with Gmail, also. They promise not to divulge your private e-mail to anyone, but they regularly examine it (with their computers) so they can provide targeted advertising based on what your e-mail tells them you are interested in.

How powerful would that model be inside an enterprise? Perhaps the price for powerful, free, low-support (read: high productivity) software would be allowing Google a peek inside the firewall. Companies would allow Google to peek at the content (with computers) to detect what the interest areas are for each employee. Maybe Google would even want to tie into a company’s intranet ID system to learn about each individual user (gender, job role, etc.) so that Google can even better target its ads.

Google might offer businesses two versions of the software, a free one that peeks inside your enterprise and a paid one that does not look at such information.

I have no idea if Google is thinking about these things, but it is an opportunity staring them in the face if they are interested. Think about the powerful advertising they could unleash for B2B purchases if they had the access to companies that allowed them both to personalize and to present ads. Google might offer your company a discount on placing these valuable ads if you agree to open up your own company to receive them.

Google has many choices about how it can do this. Always, it must be careful of any privacy backlash, but I think many businesses (especially small-to-medium ones) would leap at the chance to run their business online. Intuit’s Quickbooks Online is not a fluke, it is the beginning of a trend. Google could ally with Intuit, salesforce,com, and other SaaS companies that would be willing to share in the advertising wealth in return for offering a free version of their service. They might work in concert with existing enterprise software vendors to convert their packaged software to SaaS. Possibly, these service offerings would not even need to be free—a deeply discounted price might be good enough for some.

I certainly don’t know if these ideas are part of Google’s plans—even their distant plans—but I do think that they have the intrinsic capabilities and the market position to try it. Maybe enterprise software is too varied and requires too much investment for such a model to work, but I am not sure. B2B purchases can be extremely lucrative and it is far harder for advertisers to reach the B2B buying team at the moment of truth. I wonder if free SaaS enterprise software is an idea whose moment is coming.

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OS Licensing for SaaS

Ross Mayfield — Thu, 12 Jul 2007 20:55:41 +0000

Open Source came before, if not provided a platform for, Software as a Service. Open Source Licenses have a big loophole for the most common method of software distribution today. Tim O’Reilly addresses this while making yet another argument for open data.

Linux Magazine’s article The GPL Has No (Networked) Future recognizes a point that I’ve been making for years: that free software license requirements to release source code are all triggered by the act of distribution, and that web applications, which are not actually "distributed," are therefore not bound by these licenses. (See, for example, my 1999 debate with Richard Stallman at the Wizards of OS conference in Berlin.)

The article describes how during the GPL v3 discussions, there was a move to close the "SaaS loophole" by including some of the provisions of the Affero General Public License or AGPL:

the FSF supported the creation of the Affero GPL and attempted to integrate it into the early drafts of the GPL3. However, that plan backfired and the FSF not only struck the text that would extend the GPL to software delivered as a service but clarified just what "to ‘convey’ a work" actually means.

Mere interaction with a user through a computer network, with no transfer of a copy, is not conveying.

In other words, software delivered as service is now officially not covered by the GPL.

…the community forced the provision out as indicated in the FSF’s 61-page rationale document [pdf] that accompanies this latest draft.

We have made this decision in the face of irreconcilable views from different parts of our community. While we had known that many commercial users of free software were opposed to the inclusion of a mandatory Affero-like requirement in the body of GPLv3 itself, we were surprised at their opposition to its availability through section 7. Free software vendors allied to these users joined in their objections, as did a number of free software developers arguing on ethical as well as practical grounds.

The article concludes that while this is the right decision, it places real limits on the long-term significance of the GPL: "The future is networked. The GPL isn’t."

Bryan Richard’s article is a great analysis and the implications of keeping the loophole open for SaaS are significant. There are both practical and philosophical reasons to close this loophole with a network use clause:

If you’re unfamiliar with the SaaS loophole, it’s probably best described by a license that actually covers it. Fabrizio Capobianco, who created the Honest Public License describes it as such:

Some people interpret distribution of software as a service not as distribution of software (because GPL v2 was created before web services were on the horizon and therefore did not address them in the license). They believe that they can use open source software to offer services to the public, without returning anything to the community.

As to why you might need it, the creators of the Affero General Public License have this to say:

We believe that certain software can extend the bounderies [sic] of a person, and therefore should not be out of the control of the individual. We believe that people’s freedom should be protected. We believe that this includes their digital interface to others.

Affero and the Common Public Attribution License (CPAL)

Many OSI Certified licenses were developed before the web became a common method of distributing an application to users. Making an application available for use over a computer network, such as an email service accessed and used like GMail, should be treated the same as compiling it, burning it on a CD-ROM, and mailed out that CD-ROM. We sought to address this issue when developing the Common Public Attribution License (CPAL). Some licenses use the Affero Network Use clause to this effect, but we chose the External Deployment clause from the Open Source License (OSL) because it is more technology-neutral (OSD #10) and future proof, and is clearer about the philosophy behind the requirement.

The other issue is the Affero license, while widely known and used, is not OSI Certified, whereas OSL is. My hope is that CPAL, an MPL plus APL plus OSL license, is approved by the OSI at their next board meeting at OSCON at the end of the month and I can write sentences with less acronyms. But my other hope is that there is a license accepted by the community that provides Attribution like GPLv3, but also closes the SaaS loophole.

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SaaS: the Death Knell for Corporate IT?

Jerry Bowles — Thu, 30 Nov 2006 20:08:11 +0000

The Enterprise Irregulars clubhouse is all abuzz these days about SaaS (Software as a Service, aka on-demand, utility, cloud, utility/cloud computing in a multitenant environment, whatever) and whether it will put an end to enterprise computing as we know it.

The consensus among the heavyweight software gurus who gather there is that is that it will, it won’t, and it might. The one thing they all seem to agree on is that SaaS is becoming an increasing popular alternative to building a massive in-house IT infrastructure and staffing it with highly-paid propeller heads.

Nick Carr cited a new, not-yet-released survey by McKinsey & Company which found that 61% of North American companies with sales over $1 billion plan to adopt one or more SaaS applications over the next year, a dramatic increase from the 38% who were planning to install SaaS applications in 2005. Carr’s McKinsey handlers cite such factors as lower up-front costs, lower total ownership costs, faster implementation than traditional licensed software and more vendor accountability as the major driving forces.

SaaS has proven to be an enormous success in the Customer Relationship Management (CRM) software marketplace with Salesforce.com’s on-demand offering becoming a runaway bestseller. And, gurus with longer memories point out that ADP, the payroll processing giant, has been doing SaaS since the 1950s so the concept itself is not new. In general, on-demand ERP applications have been slower to develop.

To the major providers of on-premise enterprise software like SAP, IBM, Oracle and Microsoft, and the systems integration firms like Accenture who make all these things work together, SaaS will be-depending upon which guru you ask-disruptive, no big deal, or possibly a big deal.

In other words, nobody knows for sure at this point exactly how SaaS is going to shake out but all of the big apps and SIs are gingerly poking their fingers into the cloud. The is-SaaS-really-cheaper-over-the-long-run argument will be a key factor.

In its latest Comparing The ROI Of SaaS Versus On-Premise report Forrester says that (based on 10-year ROI) in general, on-premise models increase in financial attractiveness as the number of users increases. That suggests that SaaS is currently more attractive for small and mid-sized companies with relatively few users and less attractive for large enterprises with many centralized users. However, Forrester adds that enterprises operating in multiple geographies with 25% or more users in remote locations benefit more from SaaS options.

Fellow Enterprise Irregular Vinnie Mirchandani says Forrester’s numbers are all wet:

At 500+ users, after volume discounts, SaaS pricing for horizontal ERP and CRM functionality could be at $ 60 a user a month. After 6 years, the point where Forrester believes on-premise becomes more competitive, the total SaaS cost is around $ 4,500 per user. I challenge any on-premise vendor combined with an outsourcer to deliver license, maintenance at 17 to 22% a year, hosting, application help desk, maintenance/tuning, upgrades etc at that price for 6 years.

Vinnie also believes that McKinsey’s is being overly optimistic when it says that SaaS use in large enterprises is about to explode.

A second key factor in adoption is cultural as some companies believe their IT customization prowess is so great that they are getting a competitive advantage from their various tweakings that would be diminished by adopting a SaaS best practice model. Somewhere, I’m sure, there are still firms that make their own electricity because they believe they can do it better than the local power company.

So, what are the near-term prospects for SaaS? On this point, there really is a consensus and that is: one from Column A and one from Column B. What we are likely to see emerge is a “hybrid” model that combines components maintained internally with components hosted or otherwise supplied by outside vendors.

Nobody has yet gone broke overestimating the ability of the SAPs and IBMs and Accentures to figure out where the big money is headed and getting there first. SaaS doesn’t change everything but it’s not going away either. SAP is said to be working on a new mid-market product featuring “alternative deployment models” that will be released in January or February.

Gee, I wonder what those alternative models could be.

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Jerry Bowles has more than 30 years of varied experience as a writer, editor, marketing consultant, corporate communications director and blogger. For the past 20 years, he has produced and written special supplements on new technologies for a number of magazines, including Forbes, Fortune and Newsweek.

http://www.enterpriseweb2.com

Microsoft Talks CRM, Benioff Laughs Heartily

WebProNews Staff — Tue, 11 Jul 2006 16:58:35 +0000

All that CRM momentum Microsoft has been touting for the forthcoming software-as-a-service CRM Live elicited a chuckle and a “Microsoft is being out hustled by everyone” comment from Salesforce.com CEO Marc Benioff.

Microsoft (MSFT) announced its CRM Live product, part of the Microsoft Dynamics family, at a Worldwide Partners Conference 2006 in Boston today. Three-thousand miles away in San Francisco, mailing list recipients at Salesforce.com (CRM) joined in Benioff’s speculation about the future: “Is this the end of software as we know it?”

Benioff seems to feel fine about the future. So does Microsoft, which brought out CRM Live in friendly surroundings. “We believe in the power of software plus services, and today’s introduction of Microsoft Dynamics CRM Live is another example of our delivering against that vision,” said Jeff Raikes, president of the Microsoft Business Division at Microsoft.

“Microsoft CRM Live will provide a software-as-a-service option for deploying our leading CRM solution and will also afford partners new opportunities to deliver their value-added services.”

Software-as-a-service (SaaS) has been a concept occupying Benioff and Salesforce, especially since they launched AppExchange in January of this year. Benioff talked more about SaaS in his email:

The world has changed. Everyone and everything is becoming a service.

It was not so long ago that most executives and companies disregarded the movement to software as service, claiming it was limited technically, or isolated to a specific market segment such as small business. Now, everyone agrees that the future of software is no software at all—but rather an industry dominated by tens of thousands of heterogeneous services delivering everything from traditional Office productivity to Verticals to VOIP to ERP and CRM systems.

Benioff called this “the Business Web. And The Business Web– with all of its innovation, creativity, and most important, customer success-won’t wait for Microsoft.”

Microsoft is not waiting either. Ray Ozzie has taken over for Bill Gates as chief software architect at the company. That means Microsoft has a shift under way to SaaS as well, with Ozzie plotting that new course.

The mobile sector will have an open source client available in August from Microsoft to connect with the company’s CRM products; however, CRM Live will not arrive until the second quarter of 2007.

Benioff sees the various SaaS offerings that compete directly with Microsoft, like hosted email servers from Google and Yahoo, and online productivity alternatives to Office like Writely, NumSum, and Google Spreadsheets. He could have mentioned Yahoo’s Mail Beta as well; it’s virtually a clone of Microsoft Outlook.

We aren’t entirely convinced the online competitors to Word and Excel pose a serious threat to Office yet. File format compatibility isn’t the same as having comparable feature sets. Criticisms of bloat in Office can probably be countered by someone, somewhere, who asked for a particular feature somewhere during Office’s development lifetime.

That doesn’t minimize the importance of SaaS. Microsoft thinks it’s important enough to redirect resources to it, even in the face of criticism that it takes the company away from its core revenue streams of Office and Windows.

If Benioff is right, SaaS is even more important than Microsoft believes:

It will not be dominated by any one particular company or application or geography. The reason is that The Business Web will be best known for its ability to easily create composite applications, or what is now popularly known as “mash-ups.”

No one can turn back time, and the Pandora’s box of services is now opened. New companies being funded on Sand Hill Road are not software companies but services companies. And, entrepreneurs around the world are starting their own companies to take on this great new opportunity of creating The Business Web.

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David Utter is a staff writer for WebProNews covering technology and business.

Microsoft To Improve SaaS For Hosters

WebProNews Staff — Tue, 16 May 2006 22:20:17 +0000

In recent years, Apache Web server plus Linux equaled another Internet space Microsoft couldn’t really wedge itself into. The success of the software as a service meme has driven the software giant to beef up its Longhorn Server’s ability to handle hosted applications.

When (if) the Longhorn Server makes its debut in the second half of 2007, it will be include enhancements to its database software, development tools, and run-time environment, all of which should make it better for running Web applications.

The directive to improve Web app capabilities stems from CTO Ray Ozzie, says InformationWeek. The new and improved server will include improved Internet Information Services, which are intended to give system administrators more control of various Webpage components like dynamic HTML, PHP, and Secure Sockets Layer.

Longhorn Server and Windows Vista also will contain a new scripting language and command-line interface called PowerShell for quickly moving .Net workloads and Exchange mailboxes among groups of computers. Muglia calls PowerShell “critical to hosters.”

In addition, SQL Server, Visual Studio, and .Net run-time environment will all be upgraded for improved application hosting.

SAP enters SaaS market

Neville Hobson — Fri, 03 Feb 2006 15:54:15 +0000

Yesterday, the German enterprise software vendor SAP announced it is entering the hosted software-as-a-service (SaaS) market with the expansion of its mySAP CRM offering to include a hosted option.

The first service SAP will offer as a subscription is its sales-on-demand solution, with pricing from $75/user a month, and with hosting services from IBM.

In a Business Week article yesterday discussing SAP’s move, market researcher IDC estimates that, while on-demand sales made up only about 6 percent of the roughly $9 billion CRM market last year, that percentage could rise to as much as 25 percent in five years. A commentary by Line56 also yesterday says SAP’s announcement illustrates a convergence of interests and models as the 1990s best-of-breed concept fades further into the distance.

DestinationCRM.com’s report on the CRM market leaders in 2005 says a recent AMR Research report indicated that 47 percent of large enterprises, or companies with more than $1 billion in revenue, were going to look at the hosted model as part of their “going forward CRM strategy.” If there is a single one-to-watch on-demand provider, destinationCRM says, it’s Salesforce.com.

One to watch right now clearly is SAP. The obvious new-customer target for SAP would be Saleforce.com (whose CRM SaaS pricing starts at $65/user a month). That’s not quite how Business Week sees it, though:

[...] While SAP’s battle with Salesforce.com is lively, its most ferocious competition is with Oracle, the No. 2 corporate applications company. With the completion of its $5.58 billion takeover of Siebel Systems on Feb. 1, Oracle overtook SAP to become the leading traditional CRM software supplier.

Oracle already has both traditional and on-demand CRM products, as does Siebel. Now, with the combination, it expects to make headway against SAP in both spheres. That’s partly because the uncertainty about Siebel’s future has been resolved and customers are feeling more comfortable about buying its software again. Juergen Rottler, executive vice-president of Oracle On Demand, says Oracle will be much more aggressive about pushing on-demand services than SAP. “We believe that on-demand is the future of our business,” he says.

Ones to watch.

Neville Hobson is the author of the popular NevilleHobson.com blog which focuses on business communication and technology.

Neville is currentlly the VP of New Marketing at Crayon. Visit Neville Hobson’s blog: NevilleHobson.com.