The SaaS Explosion of 2013: Part II – The Server-Side Pull

We are at the tipping point of server-side capabilities for SaaS that will enable an explosion of SaaS development.  The upsurge of Server-side enablers, in aggregate, will knock down many barriers to building great SaaS applications enabling more and richer SaaS applications appearing in 2013.

 

Top 5 reasons why Server-side innovation will accelerate SaaS adoption

 

1)      The Credit Card payment and free trials for IaaS/PaaS services

One of the greatest innovations of Amazon’s AWS was the ease of gaining cloud computing resources through credit card signups and free trials.  Amazon courted programmers by removing financial barriers to creating Cloud applications – with no management financial approval required; skunkworks projects by internal development teams and cash poor entrepreneurs blossomed.  Amazon followed Salesforce’s Land and Expand Strategy getting a foothold into a company with a small customer investment and then expanding.  AWS enabled many new SaaS applications to be built enabling Amazon to benefit from these applications’ explosive growth.

Microsoft followed Amazon’s lead by offering free trials and an easy purchase of computing resources, while some more traditional hosting firms looking to become IaaS/PaaS providers don’t get the value of seeding their use by entrepreneurs and early adopters within an organization.

2)      PaaS Matures

While Amazon made it simple to develop applications on their cloud with IaaS services such as EC2 and S3, PaaS is maturing to raise the level of abstraction reducing the grunge work of getting an application deployed in a production setting.  Major SaaS players, Salesforce and NetSuite, are offering their own platforms, Force.com and NetSuite SuiteCloud as PaaS platforms available to other SaaS companies.  Salesforce also acquired Heroku as a second PaaS platform supporting Ruby on Rails.  Microsoft and Google have their own internally developed PaaS platforms with Microsoft Windows Azure and Google App Engine.  All of these PaaS platforms (and many more) are enabling efficient ways to develop new SaaS offerings at lower cost and less time.

3)      SaaS enabling toolsets proliferate — The SaaS ecosystem develops

Beyond PaaS, the cloud ecosystem is developing rapidly to accelerate the development of SaaS applications.  For ISVs with legacy Java applications, Corent Technologies provides a platform to enable the essential conversation of on-premise software to a multi-tenant architecture.  Many other new solutions such as RightScaleare being offered to the market enabling ISVs to build and scale robust SaaS applications to the enterprise in areas including provisioning, user authentication and authorization, metering and billing of SaaS usage, performance monitoring and exception handling, and auditing capabilities.

4)      SaaS integrations enable SaaS to become part of the IT ecosystem

Integration with SaaS applications (or on premise applications) has been difficult.  Existing EAI tools were complex and best suited for applications behind the firewall.  New tools such as Dell’s Boomi greatly simplify the integration between SaaS and legacy applications.  RESTful APIs are becoming prevalent often replacing the much more complex (though more powerful) SOAP protocol easing the ability to realize the potential of Mashups through simple URL based procedural integrations.  Companies such as Google have abandon SOAP interfaces in favor of the simple REST architecture.   Nearly 50% of Salesforce daily transactions are performed over their API.

5)      The Cloud ecosystem matures

The crash of 2011 (Amazon’s AWS outage on April 21, 2011) seemed like ancient history.  We thought (hoped) those system wide failures were behind us until Microsoft’s Azure failed on February 29, 2012 not being able to handle leap years!  Amazon, Microsoft, and the industry has made major strides in reliability and isolating failures that caused the cascading failures we had seen.  While the reliability of the infrastructure has become more mature and reliable, perhaps more importantly, SaaS developers understand the limitations and are building applications more tolerant to infrastructure failures.  Maturation of the platforms and toolsets, and a better understanding of their capabilities by SaaS vendors is leading to the building of SaaS applications that are highly reliable, scalable, secure, compliant with regulatory standards, and auditable.

These developments in 2012 will lead to an explosion of great new SaaS applications being deployed in 2013.

Coming Next — Part III, “The Customer Pull”



About US

Dave Key

Dave Key is a SaaS thought leader who has built and advised SaaS companies for the last 12 years. Dave has co-founded three software companies: FileNet, FieldCentrix, and YouMail building revolutionary, large scale software products for new worldwide markets.

Dave has a breadth of experience as a CEO, Software VP, CFO, Chairman of the Board, Audit Committee Chairman, Advisor, and Angel Investor.

Dave assists companies with their SaaS strategy and execution to thrive in a world moving to the cloud and mobile platforms.