The SaaS Report

We have had interesting discussions with several partners around Business Intelligence in the Cloud. Thought I would capture the use cases, so that you can take these into consideration while formulating your BI Strategy.

1) Most ISVs are looking to build Analytics for their mature SaaS Applications and view this as a key growth area. Covered Xactly in an earlier post. Here is the link to Trading partner Intelligence Service for Suppliers from SPS Commerce.
Few lines from the page are -
"Based on a multi-tenant architecture, our Trading Partner Intelligence service lets customers take advantage of common hardware, software and staffing resources to achieve superior reliability, faster implementations and lower total cost of ownership. Its SaaS architecture also allows multiple parties in the supply chain to access real-time data from any location via a standard web browser"
The dashboard screenshots developed in OBI EE are of course pretty. For the offering to be multitenant, VPD can be implemented in the Datawarehouse env

2) Can we offer Analytics as SaaS for our On Premise Software as customers are not willing to spend on On Premise BI infrastructure? This question is becoming increasingly common. The design considerations for this model are more challenging. Where will the Datawarehouse reside? If the Datawarehouse is at your hosting site, how should the ETL process be designed to overcome the problem of moving large amount of data over limited bandwidth? How can security be ensured? These technical issues can be addressed, if you can make a successful business out of offering BI as SaaS.

3) Can I use public cloud infrastructure for my BI? Some of the reasons why you should use Cloud are discussed in this case study. If the BI service provided is indeed transient e.g. quarter end reports or demos then there might be a valid use case for using Cloud. If you want to use any Oracle BI productsfor such a use case, we can work with you. This is certainly the most challenging scenario particularly if Hybrid (using both your own and cloud infrastructure) strategy is used.

OpenWorld 2009 will have several opportunities for you to discuss SaaS & Cloud Computing

1) SaaS & Cloud Pavilion - Get to know exciting offerings from Oracle partners in the area of SaaS & Cloud Computing. If you want to showcase your solution/service here, please drop us an email at saasprograms_ww@oracle.com. Needless to say, this pavilion will be popular this year. You would need a presence here if you want to get the conversations going.

2) S308942 Develop Software-as-a-Service Applications on the Oracle SaaS Platform - For all developers & architects building new SaaS Apps or converting existing apps to multitenancy.

3) S307767 Deploying an SaaS Application on the Oracle Platform: Callidus Case Study - For audience interested in learning how SaaS is deployed. Callidus On demand SVP will also talk about how he launched the Callidus SaaS business and brought it to its current position.

4) S308509 Get Ready to Sell: 2010 Is the Year of Enterprise SaaS - OpSource specializes in SaaS Hosting and so has a broad visibility across different SaaS ISVs. OpSource CMO will talk about how you can grow your SaaS business.

5) S311783 ISVs, Learn How to Partner with Oracle in Your Transition to SaaS - Oracle A&C will tell you how you can partner closely with Oracle.

6) S309755 Software-as-a-Service Transformation Demystified and Accelerated - CSC Practice Director will disscuss their framework and services to accelerate the move to SaaS.

7) S311937 Cloud/SaaS/On Demand: Delivering Software the Way Customers Want to Consume It - Oracle On Demand Presentation on SaaS & Cloud offerings & vision.

8) S310396 Oracle and Accenture Point of View on Using Oracle Applications and the Amazon Cloud - Accenture will share their experience in deploying Oracle Apps in the Cloud

9) S312566 Clear Up the Cloud: Key Infrastructure Requirements and Real-World Implementations - In this session, NetApp Founder and Executive Vice President Dave Hitz discusses current and future data center infrastructure requirements for cloud computing. The presentation also shares lessons learned from Sprint's deployment of cloud services

10) S312681 Financial, Operations, and Regulatory Considerations for the Cloud (KPMG)

11) In-depth presentations on using Oracle products in the Cloud -
S311507 Oracle Fusion Middleware Technology for Platform as a Service - Will discuss using Oracle FMW as a foundation for setting up your own PaaS
S312630 Cloud Computing with Oracle Fusion Middleware
S309525 Identity Management and the Cloud: Stormy Days Ahead? -
S311356 Oracle Database in the Cloud
S308721 Cloudy Days for Service-Oriented Architecture?
S309451 Building a Distributed Computing Infrastructure, Using Oracle Coherence
S308592 Software Assemblies in Oracle Fusion Middleware for the Virtualized World
S312109 Provisioning Oracle RAC in a Virtualized Environment, Using Oracle Enterprise Manager
S308460 Enterprise Data Services in the Cloud with Oracle Fusion Middleware
S307483 Castle in the Clouds: SaaS-Enabling Oracle ADF Faces Applications
S310084 Databases in the Cloud: Oracle TimesTen In-Memory Database on Amazon Web Services

Comparing this with the sessions last year, one can clearly see the uptick in interest around this topic.

Attended an IDC briefing on Going Hybrid with SaaS and was very pleased with their definition of Hybrid. The point they made was that the customer needs to be provided the choice to buy the same software either on premise or as SaaS. This is Hybrid. Not offering a stripped down version of your rich on premise app as SaaS in hope of alleviating competitors’ threat or offering primarily on premise apps plus some additional services delivered as SaaS (read Software plus service).

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

If I would to filter out the two most common topics we discuss with partners in our one on one meetings or through our email account saasprograms_ww@oracle.com, it has to be Licensing & Data Architecture.

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

SaaS ISVs do face a choice these days of deploying their software on the cloud - Public or Private. Private Cloud is your infrastructure behind a firewall. The infrastructure can reside in your data center or at a hoster like Savvis. Public Cloud is services like AWS which does not require you to set up your own infrastructure.

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.

How do we go about this?
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Enterprise ISVs adopting SaaS seem to follow two distinct approaches.
1) Some see immediate requirements to provide a hosted version of their software. They are working with Managed Service Providers to host their existing application as is. They want to gain experience in supporting hosted software while investing long term to modernize their application to deliver true benefits of SaaS in terms of Web 2.0 UI, quicker implementation cycle and additional monetization capabilities. They want the MSP to provide capabilities like subscriber management & integration, which they can use when they are ready for it.

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.

On the last day of 2008, I would like to reflect on developments this year.

- 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.

Attended a conference few weeks back and noted down some new developments as noticed by the SaaS community.

- 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.

Had a chance to attend an IDC event in SF in mid Sept. They said that they are updating their forecast for worldwide SaaS Applications spend from ~14B to ~16B by 2012. Another interesting trend is spending by enterprises will grow 14% faster than SMB.
The theme of the event was SaaS integration as they think this has surpassed Security as the number 1 concern especially for enterprises adopting SaaS. OpSource CEO talked about, how exposing WebServices in your application opens up a new Sales Channel through integrating applications eg. Intacct gets a new customer every time RealPlace gets one. It was eye-opener to find out that only 10% of OpSource customers have exposed their applications as WebServices. Read the integration post below and do something if you are not making use of this Sales Channel.

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.

Oracle Open World is around the corner (Sept 21-25). We are excited about several sessions during the open world where you can learn more about Oracle SaaS Platform

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.