The Evolving Role of Hosts in PaaS & SaaS Enablement
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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Agreed 100%.
Managed Hosting companies are currently utilizing the SAAS buzz as just that. A Marketing “buzz word” that is utilized for capturing leads.
I do believe that Platforms such as SaaSGrid will have that revolutionary affect that we are looking for.
I also believe that Opsource is a little TOO close to Salesforce to do anything about it.. :-)
Certification of consulting partners such as Konverge on Platforms such as SaaSGrid will go a long way to help ISVs.
We are almost there Sinclair, I see it coming.. :-)
Cheers,
Uri,
One thing you’ve pointed out that I didn’t highlight but explicitly believe is the importance of consultants in this ecosystems. Being a transitional period, there is much to be said for having folks with expertise in SaaS business models and technical implementation on your side.
My goal at the platform level is to become a business hub for these interactions. The business and technical coordination possible through a platform is an amazing prospect, and having consultants and hosts on board can help make it happen.
Sinclair,
Do you envision an overlap in functionality between SaaS platform providers and hosting providers?
Or do you see the hosting providers handling the virtualization aspects while the platform handles application management and (more importantly) business aspects?
Hi Dan,
That’s a great question and I’ll take the liberty to chime in with my two cents. I do believe that PaaS providers and hosting providers will overlap in functionality to some degree but that will only be the case in the early days of PaaS where there is still an unclear concept of what they are or what they do and where there isn’t a PaaS solution in the market that brings hosting companies into the mix.
As an example we see hosting companies like OpSource trying to move upstream by offering a PaaS mix of their own or companies like Salesforce offering the platform and the hosting themselves.
I believe that the way things will turn out is a handful of PaaS offerings where hosting companies participate by managing the hardware resources that the PaaS offerings use as well as offer additional services like application support and specialized resource allocation but the platforms will handle the application management as well as business services to help run operations.
Clearly there is room for many things to happen but I think that companies that are trying to be the hoster as well as the platform like Salesforce or OpSource can only marginally succeed as a PaaS provider but won’t be able to compete with PaaS offerings that are not tied to a specific host because of the value they offer the ISVs using them.
Cheers,
Abe
Disclosure: I work at Apprenda, a PaaS company.
Dan,
I envision controlled overlap. PaaS offerings will most likely provide a “core” that can be extended and manipulated to offer greater value.
This sort of relationship is what makes the introduction of hosting providers as serious PaaS players a powerful construct.
I don’t believe that hosting companies would make a distinction between PAAS or SAAS.
More money for SLA :-)
Hi Sinclair
Whilst I would agree with much of your piece I would take issue with one key aspect. You say:
“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”
This certainly has not been the case with 7global. If we have redecorated anything it has been the old ‘ASP’ label. Certainly, that has had a marketing impetus, as ASP had many negative connotations in the minds of many. SaaS is certainly sexier.
That said, SaaS is something we’ve been doing for real for years with ISVs such as LexisNexis Visualfiles, VSc Solutions, C3 Solutions and many more.
The challenge, as you correctly point out, is to evolve. Our Microsoft HMC PaaS offering, centred on Dynamics CRM is certainly pushing us further but we need to keep this investment and innovation to give clients what they want in the Cloud.
Cheers