February 27, 2009
Less than two weeks after platform-as-a-service vendor Coghead disclosed that it's going out of business, competitor Caspio has migrated one of Coghead's abandoned customers to its platform.Mountain View, Calif.-based Caspio announced a customer transition program within hours of Coghead's Feb. 18 death notice, and today Caspio revealed that it has switched over its first account as a result. Quality Behavior Outcomes, a behavior health agency in Hawaii, has moved several Web applications originally developed on Coghead over to Caspio Bridge, the vendor's app-hosting service. The process took a few days.
Caspio and Coghead present an interesting study in contrasts. Founded in 2007, Coghead is (or was) the newer company, and it had an impressive lineup of financial backers, including venture capital firms and SAP. Privately held Caspio, on the other hand, has been slowly building up its PaaS business since it was founded in 2000. How is that significant? Caspio CEO Frank Zamani is convinced that some businesses chose Coghead over Caspio because of Coghead's financial backers. "I guarantee some of the customers who signed up were relying on the fact that SAP was supporting the company," Zamani says. As it happens, SAP did provide a safety net of sorts to Coghead in acquiring its technology and hiring its employees. However, SAP didn't keep Coghead's service running or pick up its customers, who are scrambling to re-host their apps before an April 30 deadline. "SAP in a way betrayed these customers," says Zamani. "I don't think you would see that in an independent, privately held company." I asked Zamani about the issue of cloud vendor lock-in and what, if anything, Caspio does to ensure that its own customers can switch to another service provider if and when the time comes. He said Caspio provides an "export button" that provides a metadata definition of applications, which can be used for that purpose. However, not many customers actually do that. The PaaS model is too new for a lot of customer movement, he says. Caspio has "thousands" of business customers, which tend to use its platform for database-driven applications such as restaurant guides, real estate listings, and job openings. I asked Zamani how the cloud business is going, and he said that while there's a "nice uptick" in companies trying cloud services for the first time, it's somewhat offset by existing customers (think real estate or finance) that are canceling service in the face of declining business. The brutal economy has set up an unanticipated dichotomy: The same financial pressures fueling demand for cloud services are undermining the market as vendors and users cut back or, worse, go out of business. As a result, expect to see more companies switching clouds in the months ahead. Want to hear more about security and cloud computing? Internet Evolution is hosting a Webcast on this topic on March 5. Find out more. (registration required).
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