May 8, 2008 by Sinclair Schuller
Conversations in the SaaS enablement space tend to focus on companies offering cloud application platforms (such as our very own SaaSGrid), enablement technologies such as billing services offered by folks like Aria Systems, or players like Amazon that are pushing “closer to the metal” cloud utilities like file storage via S3 or virtualization constructs via EC2. Notice something? No mention of any hosting companies! Surely to some degree the infrastructure required to run SaaS offerings is “enablement”, so why so little discussion? Generally, it’s because there has been little innovation by hosting companies to date. Many hosting companies have yet to explicitly acknowledge SaaS as something that requires more than ping, power and pipe (3P). Others that have are just starting to formulate plans around SaaS. Folks like Rackspace, NaviSite, Peer1, 7Global, Attenda, and ServePath that have self-identified as “SaaS hosts” in recent history focus on professional services around SaaS as well as highlighting why their 3P is better than others and how it will help reliability for SaaS offerings. Even companies with deeper SaaS focus like OpSource haven’t gone the extra mile to truly have huge industry impact (although they have done more than most). Little has been done to address core enablement needs required by SaaS vendors, and SaaS enablement as an initiative has basically been dealt with as a new tab on hosting companies’ corporate websites that do little more than decorate old services with SaaS marketing. I think that in the near future, however, this will all change.
Hosting companies frequently get written off as dinosaurs lacking innovation and understanding, and instead are simply here to provide “raw resources” via their 3P offerings. I couldn’t disagree more. First, from the business standpoint, hosting companies have invested millions of dollars in leveraging infrastructure and highly tuned infrastructure staff. This, if exploited, can lead to awesome economies. Furthermore, they have a history of understanding what it means to be a provider of outsourced needs and acting as an extension of their customers business, as well as dealing with “recurring revenue” models. To me, all of this identifies a clear alignment of what SaaS enablement (particularly in a PaaS world) is to those that consume it.
The big question is whether hosting companies will evolve into something beyond 3P and tackle core issues in SaaS enablement. I believe they will. We’re starting to see evidence of this in some of the initiatives that hosts are pushing. Take Rackspace, for example, who recently announced CloudFS, an infinitely scalable cloud storage solution. That’s a degree of innovation that we should all appreciate. Although it’d be interesting to see if it succeeds, what excites me most is that some hosts like Rackspace are starting to “rock the boat” and seem to yearn for an evolution (or even a revolution) toward complex value propositions that matter to SaaS vendors. I’m confident that over the next 1-2 years, we’ll see some pretty cool initiatives come directly from hosts; I can’t imagine that they plan on handing over the biz to whomever wants it and that they’re content with the idea of going gently into the night.
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