Outlook for SaaS Gets Cloudy - InformationWeek

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Commentary
11/10/2008
02:04 PM
David Linthicum
David Linthicum
Commentary
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Outlook for SaaS Gets Cloudy

So Salesforce.com is moving from SaaS to cloud computing... So, What's the difference? And, where is this all going?... Once again we're playing buzzword bingo, but perhaps for good reasons... What will be interesting is the number of other SaaS companies that will follow Salesforce.com into the clouding computing space.

Salesforce.com is moving from SaaS to cloud computing, according to this article by Charles Babcock. So, what's the difference? And, where is this all going?

"At the company's Dreamforce conference in San Francisco last week - with tethered balloons floating as 'clouds' in front of the Moscone Center - CEO Marc Benioff laid out a plan for transitioning Salesforce from online applications to broader cloud services. Salesforce will let customers build and run applications on its platform, customize their applications, and tap into other Web-based services. 'There's never been a better time for cloud computing,' Benioff said."Indeed, SaaS companies are doing quick search and replaces on their Web sites and white papers, repositioning themselves as cloud computing companies. Moreover, the smaller SOA companies are doing similar things. Once again we're playing buzzword bingo, but perhaps for good reasons.

In the case of Salesforce.com, their Force platform has been up-and-running for a while now, providing API and core platform services, including development, testing, persistence and deployment. Thus, Salesforce.com goes well beyond just being an online application provider, and has been there for a bit. The change in focus and positioning is not unexpected by me.

What will be interesting is the number of other SaaS companies - and there are many after the VC buffet that occurred a few years ago - that will follow Salesforce.com into the clouding computing space, or, more accurately, just change the marketing messaging. However, most of those SaaS players don't have platform services or even APIs, thus their cloud computing focus would be a bit suspect, but the definition of cloud computing itself is cloudy these days, and getting cloudier.

I view cloud computing as the ability to leverage information and platform resources that are delivered as a service over the Internet. That's a pretty broad definition, but if you think about it, we're looking to extend our platform infrastructure, mixing and matching resources, with both internal and external services. The value is to selectively leverage remote services as it makes sense for the business.

That said, existing SaaS companies would be well served to focus on the back-ends as well as the front-ends, or the non-visual aspects of their offering - in other words, the ability to consume information either through the browsers visually, or though Web APIs that are designed to allow computer-to-computer communications. Thus, you can leverage information produced by APIs for mashups, portals, enterprise applications and so on.

Truth be told, most SaaS companies have done a poor job of API enabling their applications, if at all. Thus, their participation in the cloud computing movement will be dependent upon their ability to alter their technology and market positioning. I'm not sure that most will be successful at accomplishing those tasks, and many of those core services that support business processes, such as sales force automation, tax management, HR management, etc., may come from Google and Microsoft, at the end of the day, not from your friendly SaaS provider. That's a shame.So Salesforce.com is moving from SaaS to cloud computing... So, What's the difference? And, where is this all going?... Once again we're playing buzzword bingo, but perhaps for good reasons... What will be interesting is the number of other SaaS companies that will follow Salesforce.com into the clouding computing space.

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