Having talked to several ISVs, all of them understand the need of going Hybrid. While the value proposition for SaaS is evident (customer does not deal with non value adding activity of maintaining hardware and software), there are several reason why some customers demand on premise option. The reasons vary from security concerns or tight integration needed with on-premise systems to customers IT departments would rather buy on premise.
This brings us down to the question, whether the same product can be built in a manner so that it can be deployed on premise and as SaaS. It certainly can be done if you are using the Oracle Platform for SaaS as a foundation to build the apps. The Platform allows you to build rich applications, which can be deployed on premise or hosted in a cost effective, scalable manner. Oracle's next generation Fusion Apps, built on Oracle Platform, are designed to be delivered both on-premise and SaaS.
IDC also made the point, that managing a Hybrid business is a challenge whether it’s designing the backend systems or managing the sales force and the channel partners. We have invited our enablement partner PwC to share their thoughts on this in our July SaaS webinar
]]>As one of our partners put it, Oracle understands SaaS Operations and our licensing supports “real usage” versus static server / cpu / core model. Further, based on your business model we have different options to license Oracle SaaS Platform in order for you to be successful. Similar to Oracle Fusion MiddleWare, the Oracle SaaS Platform is not a single item on our price list, but you license the components you need. As I mentioned in one of my previous posts, increasingly a number of our customers have started buying most of our components, which are tested to work together. This enables them to quickly assemble a common platform in-house to deliver different subscription based software services to their customers. I know, you will still have questions about how our licensing can adapt to your business model. In our monthly SaaS webinar series, we will be covering this topic in June. Please register here. We also send a recording link to registered folks in case they are not able to join.
I'll cover the Data Architecture topic in a later post
]]>I read an article which talks about using a Private Cloud first to navigate the waters before jumping on to a Public Cloud. You can read the article on why Private Cloud might be a good place to start.
Building a Private Cloud starts with standardizing your operational environment and implementing virtualization. Oracle started doing this quite some time back. As has been well documented, consolidation of datacenters along with business process standardization and self service initiatives saved Oracle more than 1B. Now, Oracle IT is standardizing the operating env and has become the biggest user of Enterprise Linux. Virtualization is changing the game for us. The obvious benefit is hardware consolidation. The other more substantial benefit is, Oracle VM allows IT to decouple the software from the hardware (software can be certified on Oracle VM and x86 hardware can be bought later as needed). Virtualization allows compute resources (hardware) to be built generically and applied for compute needs (software) as needed. Oracle Data center is a pool of low cost hardware clusters on which a VM Gold image can be quickly deployed as needed providing us massive elasticity to respond to real-world demands while allowing us to manage the grid effectively. Oracle Enterprise Manager allows us to provision & manage application, accelerate detection and perform diagnostics and remediation.
For large ISVs, with their own data centers, and hosting providers, supporting smaller ISVs, there is a lot to be gained by taking this first step towards building a private cloud.
2) Others are investing to come up with a standard platform themselves to deliver SaaS. This Platform is similar to Forrester's Reference Architecture - http://www.forrester.com/Research/Document/0,7211,53987,00.html
The Platform consists of a framework for them to -
Develop & deliver a multitenant, metadata driven SaaS Application
Manage Application LifeCycle
Integrate their Application with other SaaS/On premise Application
Manage subscribers in a decentralized manner
Manage Billing & contracts
Monitor and communicate SLAs
Having interacted with several ISVs, there is no right or wrong way. It is important that you have a long term vision of where you want to go but are flexible to adapt. Oracle provides robust technologies and we have partnered with a ecosystem of partners to facilitate your transition.
Is it Profitable
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You will find numerous articles debating this. Obviously you need to have your own business model of how you will be profitable, but one approach which seems to be working is targeting enterprise customers. One ISV mentioned that they became profitable very quickly for their On Demand LOB as they decided to target enterprises which buy more seats for the same amount of effort. It seems to be working for NetSuite too http://www.mycustomer.com/cgi-bin/item.cgi?id=134179&d=101&h=817&f=816. If you are targetting SMB then ISVs are trying a whole range of plans to gain profitability - automated provisioning which limits customizability option provided, channel selling, multitenancy.
Cannabalization
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One major concern which gets raised is how do you prevent cannabalization of your on premise software. I have seen two scenarios emerge here.
1) You do not have a choice as your customers force you to host your own software as they don't want to deal with that anymore. The gross margin for delivering SaaS is good if you do it right - Less handholding of the customer, multitenancy or minimum number of users in single tenancy, streamlined operations with high degree of automation. If you are not spending in sales & marketing and just moving your existing customers to SaaS, you will end up making more money in supporting them from your own hosting site.
2) Find a new market for SaaS. Two examples are serving SMBs if you are serving only enterprises with on premise software or going to new geographies.
- Our partners continue to use Oracle Database & WebLogic Server to build & deploy SaaS applications. Was able to capture some more use cases in case studies - http://www.oracle.com/technology/tech/saas/partners.html
http://www.oracle.com/technologies/saas/quotes.html
There are several ISVs who we have not reached out to
http://www.oracle.com/us/corporate/press/017501_EN?rssid=rss_ocom_pr
Please feel free to contact me in case you want to highlight your application in a case study or our webinar series.
- As integration becomes important for customers, Oracle SOA suite became more relevant for integrating SaaS applications with other SaaS & on-premise applications (Enterconnect - http://www.oracle.com/technology/tech/saas/case-studies/enterconnect.pdf, Rackable Systems - http://www.oracle.com/go/?&Src=6637793&Act=4)
- As mature SaaS players look to differentiate themselves from the competition, Oracle BI usage is increasing. Xactly stands out in that respect http://www.xactlycorp.com/news_events/pr_042808b.php
- Oracle BRM (Billing & Revenue Management) was added to our SaaS Platform. We now offer a complete, scalable, integrated platform, which will accelerate your time to market. At the same time we allow flexibility for you to choose individual components and do not lock you in.
Please use below links to learn about our platform
http://download.oracle.com/opndocs/americas/50510.html
http://www.oracle.com/technologies/saas/docs/saas-presentation.pdf
Or enroll for our Jan SaaS Webinar
http://www.oracle.com/go/?&Src=2931347&Act=183
- We continue to work with hosting providers in all parts of the world so that they are well trained in supporting SaaS applications deployed on Oracle. ISVs are interested in using Oracle and if the hosting provider supports Oracle it offers them an added advantage. Oracle allows hosting providers to meet SLAs at low TCO with support for Grid, Integrated Management, Virtualization and Identity Management.
- As SaaS adoption increases, more system integrators became interested in beefing up their Outsourced Product Development capabilities to support SaaS. Services which are being offered for Oracle Platform are -
· Rapid development of metadata-driven, customizable, service-oriented applications with rich Web2.0 style UI using JDeveloper and ADF.
· Deployment support on scalable, grid platform comprising of Oracle Database, Oracle Fusion Middleware & Oracle VM.
· SLA modeling and enforcement with a top-down application management approach using Oracle Enterprise Manager.
- Ensure security for hosted on-demand applications and address privacy, compliance and regulatory concerns using Oracle Identity Management and Oracle Advanced Security.
- Develop operational reports and in-context actionable insight using Oracle Business Intelligence.
- Build comprehensive integration across data, user interface (UI), business process levels using Oracle Fusion Middleware.
We would introduce one SI in our Apr SaaS Webinar.
- Partners showed interest for Cloud deployment options provided by Oracle. Oracle allows developing SaaS application and deploying to internal (http://www.oracle.com/technologies/virtualization/index.html) or external (http://www.oracle.com/technology/tech/cloud/index.html) clouds.
I would like to wish you a happy and prosperous 2009 and look forward to working with you next year.
]]>- Current economic env will dictate demand for SaaS apps eg procurement apps are doing well as they reduce cost of operations.
- Point solution space is getting crowded and commoditized. Suites will emerge by categories eg Expense Mgmt, HR etc.
- Multi Tenancy is not a significant advantage in terms of reducing expenses.
- SaaS companies need more cash upfront than traditional companies. Some companies are able to sign longer contracts with their customers and get cash (discounted) upfront.
- The lead generation process is online (website, search) and in most cases the customer is able to complete the buying process online.
Future trends - SaaS will be accepted at enterprises, Vertical SaaS applications are emerging, BPO will drive adoption of SaaS, SaaS companies will provide benchmarking data based on aggregated data of customers, integration and prescriptive analytics will drive future investments, consumer web effect (ease of use, mobile) and cloud computing will force enterprises to adopt SaaS.
We are delivering a webinar with Callidus on Nov 18 -
http://www.oracle.com/go/?&Src=2931347&Act=202
Jeff Saling, Callidus SVP in charge of On Demand business has some real good insights to share based on his experience in taking Callidus On Demand from scratch and making it a sizeable business.
Oracle Open World last week seemed more like a rock concert than a tech gathering. Oracle had a number of announcements including plans to offer and support Oracle database and Oracle Fusion MiddleWare in the Amazon Web Services Cloud. This definitely provides a new deployment option to ISVs for their SaaS production or test applications. If you want to explore this, please drop me an email and we can work closely with you on this. 3 of our partners - Intacct, OpSource and Xactly presented on their SaaS architecture and were well received. Interesting there were more SIs than ISVs in these sessions. Met quite a few SIs who are using their vertical domain expertise to build an application and offer as SaaS. However, they still value the services part more than the application and the application is a bait to get the customer.
We continue to hold monthly SaaS webinars in which we provide an overview of the Oracle SaaS Platform & the SaaS program and invite a partner to talk about his/her application. In Oct I will be presenting with Where 2 Get It CTO. The link to register is here.
Let me know if you want to hear something specific from us.
1) S299905 Oracle’s Vision for On Demand: An Introduction Watson Wat, Oracle Monday
09/22/2008 13:00 - 14:00 Intercontinental Hotel
Grand Ballroom A
2) S300466 Software-as-a-Service Hosting: Oracle Database 11g John Rowell, OpSource; Gordon Smith, Oracle Monday
09/22/2008 14:30 - 15:30 Moscone South Rm 307
3) S300467 Software-as-a-Service Development: Oracle Database 11g Aaron Harris, Intacct; Gordon Smith, Oracle Tuesday 09/23/2008 09:00 - 10:00 Moscone South Rm 307
4) S300468 Xactly and Oracle Database 11g: Multitenant Database Architecture for Software-as-a-Service Applications Satish Palvai, Xactly Corporation; Gordon Smith, Oracle Tuesday
09/23/2008 11:30 - 12:30 Moscone South Rm 307
5) S298754 Using Oracle Database in the Cloud Bill Hodak, Oracle; Sushil Kumar, Oracle Wednesday 09/24/2008 13:00 - 14:00 Moscone South Rm 305
6) S300458 Building Commercial Software-as-a-Service Applications with Oracle Application Express Francis Mignault, INSUM; David Peake, Oracle ; Paulo Vale, Neoface Wednesday
09/24/2008 17:00 - 18:00 Moscone South Rm 304
7) S299137 Enterprise SaaS: Behind the Operational Scenes of Oracle CRM On Demand
Adam May, Oracle; Thomas Pettersson, Visa Inc. Thursday
09/25/2008 15:00 - 16:00
If you would like to schedule a one on one meeting to engage with Oracle SaaS Program please drop an email to shivanshu.upadhyay@oracle.com. Otherwise also, I would love to meet you in case you are attending and have an interest in Software as a Service.
]]>The very minimum, which the software vendors need to do to make their applications integration ready, is to provide WebServices APIs for all entities and operations, which can be of interest to an integrating application. These interfaces should be well defined by the vendor. e.g. Oracle CRM On Demand Web Services White paper.
Once you have provided these web services, are you done? Depending upon the criticality of the business services you provide, you might have to take this one step further and publish your web services on a Service Bus. A Service Bus provides a much-needed intermediary layer that facilitates data delivery, service access, and service management. It also supports intelligently directed communication and mediates relationships among loosely coupled and decoupled business components. Read this article for all the virtues of a Service Bus and decide for yourself. In the SaaS world, your hosting provider might offer a Service bus e.g. OpSource Service Bus or you will have to look at providing the Service Bus infrastructure yourself.
Once you have offered the above, you might be able to convince your customer. However, to provide the killer value proposition, spend some time to think about the processes your customers would be using your application in. What are some of the other applications, which will be used in these processes? It is then time to build pre-built Process Integration Packs using frameworks like Application Integration Architecture . Don't forget to charge separately for these packs. Your customers will pay you gladly for solving their SaaS integration challenges.
]]>Percent Reason
66% Integration issues
61% Total cost of ownership concerns
55% Lack of customization
50% Security concerns
42% "We can't find the specific application we need"
39% Complicated pricing models
39% Application performance
34% "We're locked in with our current vendor"
Are there other major concerns, which are not reflected in this survey? I will try to capture some strategies to address these challenges in the coming weeks.
]]>For On-premise software vendors looking to offer an On Demand solution, what should be the thought process? Like any other business, you should start with defining your business model. What is the value proposition of your On Demand offering, what is your target customer segment and how will you make money.
It might be the case that your On Demand software targets the same market segment as the On-premise software and you want to add On Demand as an additional delivery channel due to customer demand. In this case you can work with a hosting service provider like Oracle On Demand to host your On-premise software without much technical change. Due to the commoditization of hardware and emergence of virtualization technologies, the cost of operating your On Premise software in a On Demand environment for multiple customers is not as high as you think. However, you will have to deliver on key functional advantages of SaaS. Customers should be able to try out your software online before buying it, they should be able to pay on a subscription basis and have a faster implementation cycle. You will have to build these capabilities on top of your existing software. You can keep the subscription model simple, for e.g. by number of customer users per month etc. Using the hosting provider services, you can slowly add additional capabilities like pre-built integrations with other SaaS and On Premise applications as a differentiating factor. It is essential that you invest in the right hosting provider.
On the other hand, if you are targeting the long tail market, then you might have to operate at a much lower cost and find additional ways of making money. This requires re-architecting components of your existing software using platforms like Oracle SaaS Platform. You might need to think multi tenancy to share infrastructure components at different layers of your software. You might have to add metering capabilities for making money through different avenues e.g. space used, features used etc. Further, you will have to continue investing in your SaaS offering to keep these customers happy. The switching cost is low for these customers. Today it is Web 2.0, tomorrow it might be something else. It is essential that you invest in the right platform, which allows you to continue delivering innovation.
Like most business problems, there is no right or wrong way of moving to On Demand. However, due to the subscription nature of the business, it is essential to move fast to capture initial customers. Once you have the customers, do everything to keep them happy.
]]>The software industry is seeing a mushrooming growth in platform choices available to software vendors looking to build their SaaS applications. As SaaS grows and platform becomes a necessary infrastructure, there is bound to be a consolidation among the SaaS platform vendors. Clear winners will emerge, if past history of software is any indication. Till that happens, what should be your decision criteria for choosing the platform? Here are some thoughts on this topic
1) Functionality - If your key differentiation is functionality like mobile operation, rich analytics, geospatial services, highest availability or personalized experience then the choice of platforms available to you will reduce dramatically.
2) Cost of Operation - Do you expect your business to grow. If yes, which platform will give you the lowest total cost of ownership when you have reached the pinnacle of your success? In a SaaS model, operating the software is your headache.
3) Flexibility - It is difficult to change a platform once you have built your application on it. Choose a platform which is open and a partner who has the resources to continue investing in innovation.
]]>One of my friends after reading my blog asked me to outline some of the primary benefits of SaaS. While some of the the benefits may resonate more than others with the readers, to me the primary benefits of SaaS t(real and Perceived) to the end user include: