Matt Mulligan

SaaS as Infrastructure – How Deep Can It Go?

Matt Mulligan — Wed, 20 Sep 2006 18:44:00 GMT

The Emerging Business team here at Microsoft have been kicking around the various business uses of Software as a Service applications. We’re pretty much in agreement on the prevailing business model itself, after all it’s not new (anyone remember the timesharing days?). We also agree that non-critical business apps can safely live in the cloud. But how far into mission-critical systems can SaaS be used and still allow an IT manager to sleep at night? Financial transactions? MRP systems? Application Integration?

Integration? At first glance it seems a risky proposition. After all, a company’s integration engine usually touches ALL critical systems and has access to virtually every part of the business. But when you break it down into its basic components the comfort factor goes way back up. Networking, data format mediation, process control, reporting: As far as the application at the end of the pipe is concerned, the data is coming out of some sort of cloud anyway. The security principles applied behind the firewall can now be matched by those applied outside of the firewall. So why not application integration offered as a service?

Industry veteran Dave Linthicum has figured this out, and his company Bridgewerx is doing this today. He’s turned traditional integration and business process software into a single instance, multi-tenant service that provides performance and uptimes that exceed Enterprise expectations and won’t cause IT managers to get those dreaded middle-of-the-night outage calls. Read more about it here.

SaaS is rapidly blurring the lines between what’s inside and outside your corporate computing boundaries. It’s not unusual to see an IT architecture diagram showing a hosted integration provider connecting a hosted sales force automation service to an in-house ERP package. So how deep can SaaS go? As long as service levels and security are up to in-house standards, I can’t think of a single system that won’t have a SaaS option.

To Host Or Not To Host

Matt Mulligan — Wed, 20 Sep 2006 16:39:00 GMT

I’ve had a terrific response from VCs who wanted to tell me about their SaaS-based portfolio companies. The breadth of industries covered is amazing – automotive, healthcare, financial services, logistics, retail – they’re all there. As I talked with these startups I noticed a common thread in their early-stage business strategies – the decision to use professional hosting firms for their applications.

Building out an enterprise-grade data center is hugely expensive. Most of these startups are subject matter and software development experts, but data center operations are a different animal. Why use up precious startup capital when you can hire experts to host your apps for you?

There are a number of firms out there to help. This summer I had a chance to work with the folks at OpSource and Rackspace pretty regularly. Tons of experience there. Way beyond just power & network like in the old ASP days, these guys know to help startups meet the SLAs that customers will require to trust a SaaS application. The startups I work with see the value proposition here too: Conserving funding while being able to focus on core product delivery – what’s not to like?

Turning up the volume on SaaS startups

admin — Thu, 11 May 2006 18:28:00 GMT

I’m sitting in the audience at Microsoft’s Venture Capital Summit in Mountain View, the annual get-together for VCs interested in Microsoft’s view of emerging technologies. Before Steve Ballmer talks this afternoon, I see there are several Software-as-a-Service sessions lined up. Good stuff - the topic is certainly in demand and there is a lot of curiosity about what Microsoft is doing. But what surprises me is how few of the folks I’ve talked to this morning know how we already equip startups to build apps on the Microsoft platform. Maybe this shouldn’t be the company’s best-kept secret.

Service provider licenses for hosted applications are readily available and are quite competitive against other supported software alternatives. The company’s MSDN subscriptions are an incredible deal for product development. There is a lot of technical guidance free for download. Now, I admit that smaller organizations, especially startups, don’t have the bandwidth to navigate through Microsoft to find all this out. Having an example to follow makes it easier. Having 20 examples is even better.

To that end, the Emerging Business Team is looking for select VC-backed startups who are building out SaaS offerings. Microsoft will help out with architectural guidance and support, then make sure people hear about the company’s new service. Interested? If you’re a VC and have a company in your portfolio that sounds like a great candidate, send a note to SaaSMS@microsoft.com to get more details. Microsoft has a great story to tell here, but it’s time to turn up the volume so people hear about it.