Alex Barnett blog : BungeeLabs, APIs, Amazon

8 Trends in Software as a Service Platforms

alexbarnett — Sun, 13 Jan 2008 17:40:00 GMT

To kick off the new year, I presented to around 40 or 50 members of Utah Technology Council (UTC) last week. The title of the topic they asked me to speak about was "Trends in Software as a Service Platforms". I searched around for some ideas and came across two recent posts predicting trends in SaaS for 2008, one by Phil Wainewright "Eight Reasons SaaS Will Surge in 2008" and Jeff Kaplan's post "Top Ten Reasons Why On-Demand Services in 2008". I decided to borrow liberally from these (thanks Phil and Jeff) and mash these two together (along with a couple of thoughts of my own) and present "8 Trends in Software as a Service Platforms" to an audience made up of CTOs and VPs of engineering and development for software companies in the Utah area.

In preparation for the presentation, my boss (Martin Plaehn) at Bungee Labs suggested I write up my presentation as notes blog them afterward, so here they are.

8 Trends in Software as a Service Platforms

SaaS is just part of the web mega-trend
Mainstream opinion says “Yes” to SaaS
Software vendors stampede into SaaS
All is being virtualized
Explosion of Web APIs
Economic factors favor SaaS
Enterprise and SMB IT embraces SaaS
SaaS platforms proliferate (PaaS)

1. SaaS is just part of the web mega-trend

Most of us have witnessed and many of us have been a part of the transformation in the way goods and services have been digitized, virtualized, delivered and consumed. Software, the data behind that software and the functionality that software provides is no different - software is subject to the very same transformational forces.

Just think about how even a class of product that is natively digital - such as software - has been transformed in the way it is delivered and consumed. For prosperity's sake, I've still got a few of those ZX81 software cassettes stashed away somewhere, gathering dust, looking ever more antiquated with each passing year. How will today's mode of software delivery and use look to us in a few years from now?

The web wants to connect things, and that's interesting. But connecting and interacting with "live" data, information and remote functionality make things more interesting.

At the fundamental level, the web connects things. It connects people to people, businesses to businesses, and people to businesses. Since the early 90's, the web has enabled the connection of so many things to so many other things at an ever accelerating rate, and yet we crave even more connectivity. But we increasingly also want the ability to interact with those things.

And it is the nature of these connected things that have changed since the early internet. The early web was good at connecting to static views of information and accessing limited and rigid functional services, very much a read-only mode. Then, as we learned a) the ability to read more dynamic-type information - at least regularly updated, and b) access richer remote functionality, we created whole new opportunities for ourselves. Next, we grew our ability read and write against dynamic, near real-time data and information and to program against remote functionality to create a new class of web applications leveraging those capabilities - and hence a new order of business and experiential opportunities have emerged. Some label this as "Web 2.0".

At its essence, it is the "liveness" of these real-time read-write data, information and functional sources available as "always on" services and the increasing ease to connect to, interact with - specifically change those resources available as live, programmable services that allows us to create new value out of those resources, opening up brand new market opportunities for businesses and the compelling, rich "live" end-user experiences of tomorrow.

2. Mainstream opinion says “Yes” to SaaS

Not surprisingly, Wall Street loves the the predictability of subscription services. It's good for cash flow, forecasting and business planning.

The venture firms also relish the opportunities that are opening up in a software as services-oriented economy. The ability to circumnavigate the incumbent software players with new disruptive technologies and propositions that are significantly easier to try and access for prospective customers compared to traditional software evaluation, along with usage and subscription-based business models verses the old licensing model makes investing in services-based software companies very compelling propositions from the venture firms' point of view. We should also see healthy M&A activity based on these similar opportunities in the coming year.

And then there's the trend for offshore / IT business process outsourcing. These providers will surely get in the game and make their plays through investments in and acquisitions of SaaS vendors that align well with their current core businesses.

Add to that the excitement we're reading about the SaaS space from the IT Analysts, journalists and bloggers, plus the new book by Nick Carr (author of “IT Doesn’t Matter”) - delivered by Amazon to me last week: “The Big Switch: Rewiring the World, from Edison to Google”. I think there's little doubt Carr's excellent analysis of the computing industry as an analogy to the electricity industry's shift to a utility model will be on business bestseller list for much of 2008. His messages resonates with corporate executives and end-users agree with him:

IT is a needless hassle,
it should be as easy as electricity and
be as reliable as a utility

3. Software vendors stampede into SaaS

The Big Software Players are following the early SaaS successes

CRM as a case in point. If you've been following the CRM software market, you'll know about the noises Oracle-Siebel, SAP and Microsoft started to make in the 2007 about what they are are lining up for the 2008 in terms of CRM as a service. Their efforts to emulate Salesforce.com's success delivering CRM as SaaS will be key strategic bets from the incumbents' point of view - and loud, price and functionally competitive propositions from the point of view of their existing and prospective customers.

CRM is just one of the multiple horizontal solution categories to transform from on-premise with traditional licensing model to a service-based delivery and subscription-based revenue model. ERP, supply chain, e-commerce, HR and many more...the horizontal solution list goes on. And then there are the vertical solution players...

Here's another data point to consider regarding the move by traditional software vendors to a SaaS model:

“15-20% of application ISVs have already either begun new skunk works initiatives or gained access to SaaS assets and development experience through M&A activity”
(Source: Key Trends in SaaS: 2008 and Beyond, Saugatuck Technology)

4. All is being virtualized

Virtualization is a technology trend.

Virtualization enables hardware as a service. The demand for virtual machines met by hypervisor software (VMWare, Xen, Hyper-V) and the success of Amazon's Elastic Compute Cloud (EC2) in the last couple of years point to a continuation of further virtualization of applications and hardware. Virtualization is accelerating the move from traditional on-premise software to services.

Virtualization is a business trend.

We continue to become a mobile workforce. The younger entrants into the workforce in service-oriented economies expect and want to be always connected. It's very hard work, if not impossible to get your traditional on-premise applications and centralized servers sitting behind a firewall to serve today's mobile workers. SaaS and managed services meet the needs square on.

5. The explosion of Web APIs is upon us

According to ProgrammableWeb.com, there are 559 commercial and public APIs available today, most of these are new and there are plenty more to come. How many will we see go live this year? And how many private web APIs are there and will be developed and consumed in the coming year?

Data from ProgrammableWeb.com

6. Economic factors favor SaaS

On-premise software requires upfront capital investments
To lower costs, many companies hold back on their capital investments to mitigate their risks, especially in recessions
Adopting on-demand services on a pay-as-you-go basis will be a perfect sourcing strategy for businesses seeking greater cost-controls and flexibility – the utility model

All well and good, but the real economic value of SaaS is that fact that it unleashes new value of previously isolated data silos and functionality.

7. Enterprise and SMB embraces SaaS

When it comes to IT, who doesn't like

Low-maintenance?
Low cost?
Low-resource profile?

IT and business folk like these things, and externally delivered SaaS applications deliver these benefits.

8. SaaS platforms proliferate (PaaS)

The more mainstream SaaS becomes the more the large vendors will be forced to offer effective platforms for ISVs, enterprises and SMBs.

If the move by the software vendors from traditional on-premise software to a services model is to be successful, they will need to provide programmable interfaces - not just end-user interfaces - to their services for their customers. Customers need and want the ability to access, intergrate and create new value out of live, programmable data, information and functionality living in the cloud. And in turn these same customers will want their custom-developed composite applications and integrated data available as programmable services - yet more APIs.

Customers want to unleash new value of previously isolated data silos and functionality through the development of their own applications programmed against those resources. And in turn these same customers will want their own custom-developed composite applications and newly integrated data available as end-user interfaces and as programmable services - yet more APIs. These customer needs will drive the software market to provide platforms to provide businesses and developers with with end-to-end:

programmable services and data integration
application development, testing and collaboration tools
deployment and scalable delivery

...all as a service with a utility model.

(hey...I needed to mentioned Bungee Connect just the once ;-).

2008 will mark a the proliferation of such offerings as "platforms as services" (or PaaS) through 2009, where then the consolidation will begin. Interesting SaaS and PaaS times ahead.

Update 2/20/2008: see "Time to Define "Platform as as Service" (PaaS)

The presentation seemed to go down pretty well and we had lots of interesting discussion throughtout. One of the topics we discussed was data security in a SaaS world. Don Kleinschnitz (VP, Development at Symantec) followed up with a mail linking to his blog covering Security 2.0 topics.

Again - thanks to Phil Wainewright and Jeff Kaplan for their post and to Martin for suggesting I blog this.

Podcast with John Musser of ProgrammableWeb.com

alexbarnett — Wed, 19 Sep 2007 16:38:00 GMT

A couple of weeks back John Musser of ProgrammableWeb.com joined me and Ted for a chat to discuss the state of web APIs and the API trends as he sees them.

We've now recorded the conversation and published as the first of a newly launched Bungee Line podcast series.

Topic covered include Facebook APIs, Amazon's recently launched Flexible Payment Service (FPS) , Google Base, Microsoft's Astoria and relational-data-in-the-cloud programming models and services, SaaS models and API SLAs, REST vs SOAP, "Closed is Still the Old Closed" and plenty more.

Thanks to John for his time.

Announcing Bungee Connect

alexbarnett — Mon, 16 Apr 2007 07:11:00 GMT

At last, I can tell you more about what Bungee Labs has been up to...

We've just announced details about Bungee Connect, a 100% on-demand web development and deployment environment that will be going into Beta phase in May.

Over the next three days at the Web 2.0 Expo 2007 and on bungeeconnect.com we'll be providing a lot more detail on exactly what Bungee Connect is, how it works and why we think it will be a big deal when we go live.

So before I go on, let me quote a couple of people who have already seen Bungee Connect in action behind closed doors. The following are from tonight's two press releases (1 and 2)

First off, Dion Hinchcliffe:

“Ajax is just the beginning of the RIA story and Bungee Labs provides the rest of the solution with a web-based IDE, on-demand scalable deployment, a well-designed community model and a built-in component ecosystem with real-world licensing options,” said Dion Hinchcliffe, ZDNet blogger; President/CTO, Hinchcliffe & Co.; and editor in chief, AjaxWorld Magazine. “Bungee Connect is a surprisingly complete one-stop shop for the RIA development, deployment and operations lifecycle.”

Next, Dana Gardner:

“Given the current disjointed state of tools, testing and deployment models, most developers find creating rich internet applications (RIAs) to be complex, time-consuming and expensive,” said Dana Gardner, Principal Analyst, Interarbor Solutions. “By combining development, testing and deployment functions into an integrated, low-cost-of-entry service approach, Bungee Connect both broadens the numbers of developers that can produce web applications as well as slashes the barriers of entry for creating innovative ecommerce services and web-based businesses."

The Bungee Labs team has been working very closely with the Amazon team (and others API providers) the last few months to make sure Amazon's web services "just work" with Bungee Connect. Jeff Barr, Senior Evangelist for Amazon's Web Services:

“Bungee Labs’ decision to make their development environment integrate seamlessly with Amazon Web Services is great news for our developer community,” said Jeff Barr, Senior Evangelist for Amazon Web Services. “AWS developers can now use Bungee Connect to directly access our services, which means they can build Web-Scale applications in an easy to use, browser-based development environment.”

Another provider of web APIs, Salesforce.com has also been working closely with the Bungee Labs engineers. This time a quote from Adam Gross, Vice President, Developer Marketing, Salesforce.com:

“Salesforce.com has demonstrated that the innovation and ideas of the consumer Internet are at the core of the next generation of business applications. Bungee Connect together with Salesforce.com’s Apex platform makes it easier for developers to create mashups for their businesses, and in doing so hastens the transition from traditional enterprise software to the new on-demand model of building and deploying applications.”

So, what is Bungee Connect? Well, it's a lot of things:

Bungee Connect is a completely web-based integrated development environment (IDE) for building and deploying rich Ajax web applications, from simple web apps to seriously sophisticated Ajax applications. No install for developers, no installation of delivery infrastructure, and no client install for end users.
Bungee Connect is for developers, not for consumers. Yes, it provides a huge amount of automated support for the integration of SOAP and REST-based web services, Ajax app development and state management. You can develop sophisticated apps that integrate powerful (as well as simple) web services plus develop your own logic without having to write a line of code. It massivley reduces complexity. But, nonetheless, it is for developers, not consumers.
Bungee Connect provides a completely integrated means of deploying apps to the live web. No FTP. No separation between your dev, staging, production and live environment. No local set-up on your machine. No bits to install anywhere. No web servers, no app servers, no stacks, nor libraries to install, patch or manage. No 'Yak shaving'. It's all taken care of for you. You develop your app through the browser, then deploy your app through the browser and map the app to your domain / URL (or embed the app in your site) - It's your app. Oh, and you get IE, Firefox and Safari cross-browser compat taken care of too - you build your app once and it just works in these three browsers. Sweet.
Bungee Connect includes a whole code share and team collaboration concept. You can keep your code proprietary, or you can share it with other Bungee Connect developers in your workgroup or with the wider Bungee Connect developer community. There's a lot more to this than I can cover here and I'll be writing a lot more on this soon, but I like how Mat Asay described the community aspect as a 'Sourceforge for the 21st Century'.
Bungee Connect allows developers to leverage the world of web APIs. We've been working with the API engineering and evangelist teams at Amazon, Ebay, Google, Microsoft Windows Live, PayPal, RealNetworks, Salesforce.com and Yahoo! to ensure Bungee Connect works sweetly with the multitude of their rich APIs (both WS* and RESTful). The aim is to ensure Bungee Connect can work with any web service that you choose and by working with these teams and their APIs in developing Bungee Connect, we've got a great test-bed to make sure we can achieve this goal.
Bungee Connect is No Fee for the developer to use in developing and testing Bungee-powered apps. You only pay once you've deployed your app commercially or unrestricted. We expect this to be US$1 per computer-network-interaction-hour, billed monthly. Again, more on this later.

And there's so much more. Tomorrow, anyone attending Web 2.0 Expo will be able to get hands on with Bungee Connect. We've got a booth with PCs (Windows, Macs and Linux) with the browser open (IE, Firefox and Safari) where you run through some tutorials and judge for yourself if you think we're all smoking crack (see pics below - no crack, just the booths). We'll also be updating the site with screencasts and plenty more details and Martin will be presenting and demo'ing with Brad on Wednesday morning. And by then I'm sure David might have something more to say too...

To underline a couple of points here: we're not live yet. We go into Beta in May and are looking for web developers who ideally already have experience in progamming against the APIs of the companies I mentioned earlier. So sign up if that sounds like you...

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Update:

Dana Gardner has written up his thoughts on Bungee Connect.
Short but sweet mention on Mashable.com by Pete Cashmore.

Update 2 (4/18/07)

Richard MacManus blogged it over at Read/Write Web
Ryan Stewart blogged us too :-)