Observations from where technology meets business

SAP's struggle with SaaS

sap-bbd1 Phil Wainewright makes some fascinating observations about the roll-out of SAP's Business ByDesign (BBD) SaaS offering as he arriving at this week's SAPPHIRE conference in Berlin. This interesting turn of events came up earlier this month at the SAPPHIRE conference in Orlando. Charlie Wood has more on it here and here.

Vendors planning to launch SaaS offerings of their traditional software products should take note. The internal struggle between teams competing to deliver SaaS and traditional software could get ugly. In SAP's case it appears (at least, initially) that the SaaS team is on the losing end since they are waiting until changes are released to the full product (and then installing and adapting them to the service) before announcing availability of BBD. It's not clear if this is just a startup condition or something that will persist.

On-premise vendors never have to run their own software*. This is by far the largest (and least often anticipated) handicap suffered by on-premise vendors when embarking on the on-demand model. [*OK, maybe some of them ‘eat their own dogfood’ by using it in-house. But they never really experience it as their customers experience it.] They are in blissful, utter ignorance of just how difficult it is to install and run their own products.

...At this rate, Business ByDesign is turning into a masterclass in how SaaS innovation can never thrive inside a conventional software company. Its developers started out grossly underestimating the scale of the task ahead of them. Now that they’ve started to understand what they’re up against, they’re being starved of development resources and marketing spend.

Is BBD hoist by SAP’s on-premise petard?

Dimdim Now Available as VMWare Appliance

dimdim This looks interesting. Dimdim web conferencing is removing usage restrictions from their open source version. I also think it is a smart move on the part of software vendors (open source or commercial) to make VMWare appliances available. I am already downloading the Dimdim appliance and plan on testing it myself.

In the next week we will release a new version of the Dimdim Open Source Community Edition to SourceForge.net.  (UPDATE: our new Open Source release is now available) That version is on par with the features of our hosted offerings, removes the 5 attendee limit, enables multiple simultaneous meetings and even adds a 2-way video chat feature. We have also packaged the Dimdim Servers into a single VMWare Virtual Appliance to ease the installation process.  You'll also notice much improved documentation and a new admin console.

Dimdim Blogblog

SaaS and Open Source? You are asking the wrong question!

Most everyone knows that Yahoo, Google, and many Web 2.0 companies built their SaaS offerings using open source software. Yes, they use open source to save licensing costs. Yes, they used open source to develop their services quickly using Linux, Python, PHP and a host of other high-quality components. They also benefit from the improvements these open source components see year after year.

But, does this mean that SaaS represents the best use of open source?  No, not from a customer perspective. In my opinion, many of the discussions I've been reading lately focus on the wrong question. It's not if SaaS and open source are complementary (of course they are) but how do they complement each other and, more importantly, what does this mean for the customer.

Open source is free and SaaS is often free (as in free email and free social networks). But the primary benefit of open source isn't cost savings, it's choice (to a CIO this means "mitigating risk"). Users of open source can be assured that their data or content sitting in an application will continue to be usable, even if a commercial vendor drops a service or stops selling software.

SaaS (regardless if it was built using open source software or not) that delivers a proprietary service is still a proprietary solution and that removes customer choice. And, yes, I am equating Google Sites to Microsoft SharePoint in this regard. As a customer I may not care how a solution is built but I absolutely care about choice (and as a CIO I really care about mitigating risk).

Open source software that you install on your own equipment is interesting. It gives me choice but at the cost running it myself. But, open source software provided as SaaS is downright compelling because I get the advantages of both SaaS and open source. Someone else takes care of it and I retain choice.

MicroHoo: The Odd Couple Meetings Led Nowhere | Kara Swisher | BoomTown | AllThingsD

Interesting background information about the latest chapter in this story:

After today’s events, I guess you could say Yahoo and Microsoft tried, holding a series of meetings about a possible takeover that ended up proving exactly how incompatible the companies were.

Kind of like Oscar Madison and Felix Unger, but not funny in any way at all.

MicroHoo: The Odd Couple Meetings Led Nowhere | Kara Swisher | BoomTown | AllThingsD

Via: Paul Kedrosky

Who will you trust for your cloud computing?

10837680_a6ccb07bc3_o Microsoft is getting some backlash from their recent decision to drop the MSN Music service. This is an online service that uses DRM (Digital Rights Management) technology to sell music. DRM prevents customers from buying one copy of a song and then making copies for friends. Joe Wilcox provides a good overview of what is happening here.

Online providers shutting down a DRM-protected media service isn't new. This happened last year when Google dropped their video store. At the time Google offered credits to customers losing access to their purchased videos. Microsoft is telling customers they can still listen to their purchased songs on any computer registered before the end of August. After that, if a computer breaks or is replaced you are out of luck. Needless to say, nobody likes either option.

What happens is the DRM-protected media player needs to check-in with a server from time to time to see if the song can be played. If that server doesn't respond the only thing you hear is the sound of silence (Hello darkness my old friend...). This is why content companies like DRM. They can control who accesses their content. Rhapsody, for example, will only authorize the use of songs for a week or two for customers of their subscription music service. Stop paying the monthly fee and the songs stop playing (I have to admit, I like the Rhapsody service).

I bet many customers were surprised this could even happen. But with DRM-protected music you only buy the right to listen to the music. By the way, this limited right is not new. Look at the fine print on one of your music CDs. You don't own anything other than perhaps the material it took to make the CD and packaging.

This is fine until the company running the server authorizing players decides to get out of the business. But, remember we are talking about Microsoft and Google here. These are not fly-by-night companies that might have run out of money or were gobbled up by competitors or whatever might happen to say a startup. Aren't we supposed to be able to trust these large companies? They're...you know...large, after all.

To me this shows how important trust is when it comes to network-delivered services, be it a music service or cloud computing. Whether it is an Amazon Web Service, Google App Engine, Microsoft Office Live, or whatever online service you might want to use, trust will play a huge role in determining whether or not you give them your information (songs, documents, data, applications, etc.). Trust will especially play a critical role when trying to persuade new customers to use a cloud service.

Question is, who do you trust?

"The New Phonebook's Here!"

johnson-navin-rWell, not really. But I kind of feel like Navin Johnson (Steve Martin's character in the 1979 comedy classic "The Jerk") when he finds his name listed in the new phonebook. My bio has just been added to the Burton Group site.

I joined Burton Group as an analyst in early February and the past few months have been quite an experience. This is a fantastic company and, although quite busy, I am having the time of my life. My coverage areas are open source '3C' (collaboration, communication, and content) as well as enterprise and desktop search. I am also picking up messaging platforms.

Calendar syndication and critical mass

Jon Udell has a fantastic post where he shares his frustrations about getting people to use calendar syndication. He says the real problem is getting more people to, first, use electronic calendars.

"The idea is to establish a critical mass by brute force, and allow people to see how, over time, sources that are structured and can syndicate will remain in the game, and sources that aren’t will have to sit out on the sidelines."

"It’s turning into a nice case study of how organizations and individuals can negotiate shared responsibility for calendar information that’s of common interest. But that’s a story for another day. First things first. I need to give people a reason to care about using a calendar program — any calendar program, could be Outlook or Apple iCal or Google Calendar, so long as it exports iCalendar — in preference to a spreadsheet or word processor. Although the geek tribe can scarcely imagine why, that first step is a doozy."

I think calendars are the best examples of the power of syndication. You may be reading this post in your RSS aggregator and think I'm crazy but shared calendars is one of those collaborative technology use cases that fits naturally with what people are already familiar with, managing their schedule (and for many people, managing a family's schedule).

I can sympathize with Jon's mission. In fact, I am also encouraging the use of calendar syndication in my community too. But there one key constituency who must be served to move this forward: Parents!

First, some background. My wife and I moved our family calendar from her PDA over to Airset a little over two years ago. These posts on the Enterprise 2.0 blog (the site formerly known as Collaboration Loop) provides more background about our objectives and the alternatives considered.

After switching to a shared web calendar the management of our family calendar became much easier. I no longer had to call my wife to see if we were available and we spend much less time synchronizing our day. You can't believe how much of a relief this is until that pain is gone.

Since then my wife launched a parent website for our local middle school. The primary attraction, of course, is the calendar. Fortunately, this school has a really good principal, Mr. Sanders (sorry, I can't help but call my kid's teachers and principals Mr. and Mrs.). Mr. Sanders picked up on the web calendar concept quickly and agreed to work with us. We use three calendars: one for school events, one for district events, and one for partial or full days-off. A fourth calendar consolidates all of these into a single calendar.

We made Mr. Sanders an administrator and work together to keep the events up to date. Two years later I am happy to report that the calendars have been kept up to date and Mr. Sanders has done more than his fair share of the work (to be honest, he enters most of the events now).

The results have been great. As a parent I can't express my appreciation enough for having a trusted calendar I can turn to. For many parents the calendar is simply a web page on the parent group site. But for my family school events blend nicely with our web calendar. They even provide color coding of events to make them easy to parse.

Below is how our family calendar looks. This view shows one week on our calendar. I tried to find a week that wasn't too busy (btw, I had to look ahead two months :-). You can see the color coded events that come from different calendars. The medium-blue events are from the middle school, the pinkish events are from our family calendar, and the purplish events are from the school district calendar. Partial or full-days off are colored with red so they stand out.





Our oldest child started high school this year and I am really missing not having that school calendar online. Being new to the school we didn't feel comfortable approaching the principal about doing this at the start of the school year. As a result we get multiple email updates during the week (probably averaging 5-10 messages) telling us what is happening. Of course, I rarely have time to read these messages since they come out all sorts of time during the day and they often repeat themselves. But when I need to figure out what events are coming up I have to search my email for these notices. Needless to say, I am really missing our school calendar. Our high school has a new principal who just started a few weeks ago. Hopefully, he is as sharp as Mr. Sanders (note to self: have Mr. Sanders talk with Mr. Johnson about calendars...).

Back to Udell's point about getting critical mass behind electronic calendars and calendar syndication...The key people in this are parents. Parents have to coordinate far too many calendars: school events, games, practices, dance classes, recitals, birthdays, anniversaries, doctor's appointments, and it goes on and on.

So Jon, keep aggregating your events to demonstrate what calendars can do. But, focus on how you can make a parent's job easier with calendars and your efforts will be better rewarded.

MySQL and Open Source Business Models

It's interesting to watch the disagreements over open source business models that apparently started last week when MySQL let it slip they would be offering proprietary extensions to their open source products. I think Matt Asay got it right when he said:

The key, again, is to separate the core from the complement. MySQL, the database, is the core. That should be open source. It's good for MySQL that it be such. It leads to greater distribution.

As for monetization, in open source you do it exactly the opposite as in proprietary software, which jealously guards the core and throws trifles to the crowd as free complements. In open source, you charge for the complements while giving away "the crown jewels."

But there are many bloggers who disagree with Matt, like Gianugo Rabellino, who said:

"a support model can only bring you this far as best customers turn into worst nightmares once they realize they have become competent enough to support their Open Source stuff."

Some of this reasoning probably goes back to comments Jon Williams of Kaplan Test recent made at the Open Source Business Conference 2008. Matt Assay captured it this way:

"the more happy he is with his commercial open-source software, the less likely he will be to pay for it. Why? Because his developers will acquire the expertise over time to support themselves and because the product will mature to the point that support will be less necessary."

Hence, there is no money in supporting open source software so the dual-licensed hybrid software model is the only viable business model.

Some points to make here:

  1. ANY software that matures to a point where support is not necessary is probably not being used (or is used very little and for nothing important). This applies to both commercial and open source software. I have seen support contracts dropped for commercial software too.
  2. How many companies can afford to have developers support all of their products? How many developers do you employ to support word processors? This may not be the best example but you can't assign developers to all products used within a company.

I find it hard to believe that any company (with very few exceptions) will gain enough competency in all of their open source products to not need some form of support. Most companies simply will not invest in these types of resources. Either way, they are paying for support. Either through headcount or through a support contract (and headcount gets awfully expensive).

Also, Gianguo's analogy between open source and cars doesn't work for me. He says

"The problem with commercial Open Source is that it doesn't sell cars. They sell insurance."

It seems to me there is lots of money to be made in car insurance (we surely see enough TV ads about it). Plus, there are service revenues associated with cars (at least the cars I drive) that look fairly substantial to me.

BetaNews | Google to phase in offline access options for Docs

Something we have been expecting for some time (since Google Gears came out). It will be interesting to see how well this works.

One of the most innovative additions that Google may be making to its applications suite would, in a bygone era, be one of the most basic features: the ability to save locally.

BetaNews | Google to phase in offline access options for Docs

Workstreamr: Work Made Social

This is something worth watching as it unfolds...

Workstreamr is that tool, designed to apply several complementary principles to project-based work. The combination of social media, professional networking, and 'streaming'—information being directed from applications to the user proactively via a desktop client—we call 'workstreaming.' I believe that Workstreamr is the first application specifically and uniquely designed to support workstreaming.

/Message: Workstreamr: Work Made Social

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