March 4, 2008

Microsoft also seems to be selling SaaS directly

For a while, I’ve been arguing that SaaS is naturally a direct-sales business, even when sold to small organizations. If people are willing to have their business processes handled over a telecommunication network, they’re probably willing to buy services that way too. Indeed, the very first computer services firm ever was probably Automatic Data Processing. They sort of did SaaS, and they most definitely did direct sales.

What inspires me to bring this up now is the press around Microsoft Sharepoint. Apparently, there’s long been a SaaS version of Sharepoint for big firms, and now Microsoft is rolling it out for everybody. Now, I haven’t read the press releases, which weren’t sent to me by anybody at Waggener-Edstrom and are not easy to find on Microsoft’s web site. But the reporting doesn’t seem to mention partners, except in the negative. I.e., this seems like yet another significant direct-sales SaaS business.

If you follow this logic through, it suggests that a large part of the SaaS market will wind going to large companies with global reach — whether or not the rumors are true that is currently being shopped around.

January 4, 2008

Early thoughts on outsourcing to Google Mail

Google doesn’t just offer free email of the form You can also outsource your own domain to them (free if you accept incoming ads, $50/year/mailbox if you don’t). I’ve chosen to do this, because:

  1. I need a mail host that can stand up under the kind of mailbomb/DDOS attacks that shut me down twice in the past year.
  2. Similarly, I want to diversify my email addresses among two providers, rather than leaving them all with my general web hosting company.
  3. David Ferris first wrote up Google Mail outsourcing, with a favorable view, last July. And some of his criticisms (e.g., lack of IMAP support) have already been rectified.
  4. What’s more — as I remarked last night, David and his associate Richi Jennings have been voting with their feet, and moving their own email to Google. That’s an impressive endorsement. Ferris Research is a serious rival to Gartner as an analyst firm covering email, and Richi — who evidently LOVES Gmail — has also carved out a non-trivial identity as an expert in his own right.
  5. Free sounds good, compared with the alternatives. Read more
November 20, 2007

I repeat — SaaS is not necessarily an indirect-channels business

From’s latest 10-K:

We market our service to businesses on a subscription basis, primarily through our direct sales efforts and also indirectly through partners.

Looking back, I should have quoted that in support when I wrote:

By the way, I think the assumption SAP needs to sell ByDemand via indirect channels is an erroneous one. (Dennis Howlett seems to be at least partway to recognizing this. He also reports that SAP realizes that this is truly a sales issue.) Hence my stress on SAP’s internal sales management issues.

For 40+ years, application-oriented services have been sold in large part by direct sales forces. That goes back to the other payroll processors, and to time-sharing in general. Why would it change now?

September 25, 2007

SAP ByDemand could work a lot better than critics think

As I explained in another post, it’s credible that SAP is very serious about its new ByDemand SaaS (Software as a Service) offering. While I haven’t been briefed on the product (er, service), I’m guessing ByDemand is pretty good, or soon will be. I have three major reasons for this opinion.

  1. SAP sure has a lot of resources to bring to bear – and as previously noted, I think the company is dead serious about this initiative.

  2. On the back end, the business-service granularity SAP has been implementing is well-suited to deal with the unique challenges of SaaS, both the very real (e.g., short upgrade cycles) and the largely imaginary (e.g., multi-tenancy).

  3. SAP recently hired Dan Rosenberg away from Oracle to head its UI efforts, and Release 1 of a Dan Rosenberg user interface is likely to be very good. I know Dennis Howlett has a contrary view, and he’s actually seen the product. Even so, I’m optimistic about SAP’s claims to have designed the UI with an open mind, for maximum ease and simplicity, and validated by many rounds of testing.

Read more

September 25, 2007

The unprofitability of the SaaS business is an illusion caused by growth

There’s a fallacy going around to the general effect: is the biggest SaaS company. is making next to no profit. Therefore, SaaS is currently not a profitable business.

But that’s nonsense. Here’s why. Read more

June 9, 2007

The technology of Guild Wars (overview)

Being an analyst has its perks, the main one being that you get to have some really interesting conversations. And so I recently had the chance to interview Mike O’Brien and Pat Wyatt, two of the founders and lead programmers for ArenaNet, makers of the Guild Wars MMORPG (Massively MultiPlayer Online Role-Playing Game).

If you play games of this sort, it’s surely obvious to you why you should care. But if you don’t, maybe you should be interested anyway. After all, Guild Wars is a graphics-intensive SaaS offering that easily supports 100,000 simultaneous users, while managing a gig or so of fat client even over dial-up speeds. Every user is a potential hacker, whether for fun or actual real-world cash profit, although we didn’t actually talk about security very much. And ArenaNet provides all this on a relatively shoestring budget; in particular, Guild Wars subscription fees are precisely $0.

Read more

April 7, 2007

Check Point Systems UTM-1 and Crossbeam Systems – resolving the confusion

When Check Point Systems first briefed me on their new midrange UTM-1 appliance, they neglected to mention that their hardware designs were first worked out by Crossbeam Systems. Actually, it turns out that they even buy the hardware through Crossbeam. It took a comment here from Crossbeam’s Chris Hoff for me to realize the true story. Today, I connected with Paul Kaspian of Check Point to straighten things out. Here’s the scoop. Read more

March 30, 2007

When and why to virtualize

In one of the best Slashdot threads I’ve seen in ages, a number of posters chime in with their personal experiences of virtualization. (Usage hint: Set the general threshold = 5 to filter out the dreck, using Advanced Context Controls.) The rough consensus appears to be:

Makes sense to me.

March 16, 2007

Have analytics vendors rediscovered ease-of-deployment?

Business intelligence (BI) used to be characterized by speed and cost-effectiveness — short sales cycles, low-cost departmental purchases and deployments, evasion of IT departments’ strangleholds of data, and so on and so forth. That focus has blurred, as BI vendors have increasingly focused on analytic applications or enterprise-wide standardization sales. But increasingly I’m seeing signs that the pendulum has swung at least partway back. For example:

It’s about time.

March 1, 2007

Check Point caves in

Not long ago, I wrote of Check Point Software’s unusual appliance strategy. While a lot of their sales were on partners’ Type 1 appliances – custom boxes with standard parts — the only appliances they sold themselves were Type 2 – software-only.

However, that turns out to be wrong in two interesting ways. First, it was slightly incorrect all along; Check Point’s “Edge” product line has been Type 1 for almost five years. Second and more important, a few weeks ago Check Point announced that it was finally entering the Type 1 appliance mainstream market itself. Read more

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