Cloud
Commentary
3/4/2008
08:22 AM
David Linthicum
David Linthicum
Commentary
50%
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When SaaS Means 'Services as a Service'

In the next era of SaaS, we have the opportunity to leverage discrete services for use within both SaaS-delivered and enterprise applications. These are typically Web services that provide a specific and narrow set of behaviors and data that are meant to become part of a larger application or composite. For instance, address-validation services, tax-rate-calculation services, stock-transaction services... This is the destination for the new Internet, and the next frontier for existing SaaS playe

While the number of SaaS providers grows, along with enterprise acceptance, we are really not breaking new ground. In essence, SaaS providers today provide visual systems, meaning they communicate with a human being. Also, they provide a single visual interface, and the users have to take both the data and behavior, as provided. We could call this an enterprise application that's not much more than a Web site, or an old-Web technology.

Moving forward, we have the opportunity to leverage discrete services for use within both SaaS-delivered and enterprise applications. These are typically Web services that provide a specific and narrow set of behaviors and data that are meant to become part of a larger application or composite. For instance, address-validation services, tax-rate-calculation services, stock-transaction services… you get the idea. These are not visual services, but can become core components of larger applications, and they are services you won't have to write, test, or host. Thus, you have the ability to build core applications by mixing and matching services that you rent, not create. This is the destination for the new Internet, and the next frontier for the existing SaaS players.So, where do you get these services? Most major SaaS players, such as Salesforce.com, Rightnow.com, and NetSuite.com, provide their core application functionality as a service by standing up Web services that are consumable by their subscribers. Guys like eBay.com and Amazon.com provide similar services, of course, supporting their businesses as points of integration, or extending the functionality of their Web sites and their core businesses.

However, there are emerging companies that are in the pure service provider business, renting all types of services for all types of purposes. We can call these guys service brokers, because they are providing a Web services platform from many providers to many consumers. They provide the provisioning, security, billing, maintenance, and support.

StrikeIron is the one that comes to mind. StrikeIron is not a SaaS provider, but a SaaS provider with the first S being 'Services' vs. 'Software.' They offer a variety of services, such as SMS text messaging, tax rate calculations, address validation, etc. The objective being not to provide the holistic application, but simple components that can be abstracted into enterprise and SaaS applications, as needed, for a small monthly subscription fee. Thus, you don't write it, you don't test it, you don't host it, you just leverage its functionality at a fraction of the cost if you developed the same service in-house.

I think this is the next driving force behind SaaS. As more and more businesses learn that these services exist, they will leverage them and learn the value is much the same as "traditional SaaS," perhaps even more valuable. Count on Internet-delivered service providers, including brokers, to be the next "hype cycle" in this business. I have to say, that is pretty cool.In the next era of SaaS, we have the opportunity to leverage discrete services for use within both SaaS-delivered and enterprise applications. These are typically Web services that provide a specific and narrow set of behaviors and data that are meant to become part of a larger application or composite. For instance, address-validation services, tax-rate-calculation services, stock-transaction services... This is the destination for the new Internet, and the next frontier for existing SaaS players.

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