Sinclair Schuller, CEO of Apprenda: the Dortch on SaaS 3-Q Interview

Greetings. I’m refining and revising an interview format I first borrowed/adapted from my friend and colleague Philippe Winthrop of the Enterprise Mobility Foundation. Today’s 3-Q Interview is with Sinclair Schuller, CEO of Apprenda. Apprenda sells software that helps other software companies to deliver SaaS/cloud-based solutions more easily, economically, efficiently and rapidly. Sinclair has some interesting things to say to companies seeking to deliver or to deploy SaaS/cloud-based solutions, as you’ll see right now!

Q1: What is the single greatest challenge to success for software providers seeking to deliver SaaS/on-demand solutions?

A1: Easily, it’s understanding the technical and operating transition that a product company must go through to become a successful and profitable service provider. Software companies that sell on-premises products are not accustomed to offering a service that costs money – they’re used to selling perpetual licenses that have no unit cost associated with the license. As SaaS providers, they’ll be paying for servers, bandwidth, staff, and a number of other things. How efficiently they deliver their software to leverage these costs will play into determining how profitable they are. For example, choosing to not have a multi-tenant architecture could have dire economic consequences on a unit cost level.

[Editorial Aside: there is a debate in the software industry about how relevant multi-tenancy – the ability to support multiple separate groups of users with a single copy of an application – is to cloud computing and SaaS. I recommend that you read a 2008 ZD Net blog post by SaaS/cloud veteran Phil Wainewright, “Why Multi-tenancy Matters.” I also recommend a February 2010 Information Week blog post, “Why Multitenancy Matters in the Cloud,” by Alok Misra, who works for a company that provides cloud-based applications and SaaS enablement services. Without getting to far into the weeds here, multi-tenancy is an important tool for every provider of SaaS/cloud-based solutions, but is not the only way to support multiple users cost-effectively, and may not always be the best way. Back to Sinclair.]

Operationally, [those software companies] need to consider a bevy of other issues: how will I provision customers to the SaaS offering? Will they self provision? Does it require manual labor? How will I track what customer owes what money based on usage? How will I roll out an update across dozens or even hundreds of servers with minimal downtime? All of these critical considerations play into the single greatest challenge: transitioning from a product company to a service company. We work with Microsoft .NET ISVs [independent software vendors] that struggle with these questions every day, so it’s given us amazing insight.

Q2: What is the single greatest challenge to success for enterprises seeking to deploy business-critical SaaS/on-demand solutions?

A2: Establishing trust. Enterprises have built significant confidence in their IT competence, and despite carrying the costs of direct responsibility, they lower their trust [concerns] since “it’s run in-house.” Enterprises need to understand that in reality (using subjective measure) deploying a SaaS offering is safer and more trustworthy in nearly all regards. After all, do these enterprises hide their money on-premises “under a mattress” or let a third-party provider – a bank – guard their most liquid assets?

Q3: What do you see as the next "great leap forward" for the SaaS/on-demand solutions market – technological, organizational, perceptual or otherwise?

A3: I think the great leap forward will be SaaS enablement. To date, most SaaS/cloud offerings have been built as “one-offs.” That is, each SaaS company re-invented the wheel by dealing with a huge amount of SaaS-specific architecture. Technologies like SaaSGrid will define the “gold standard” of architectures by defining advanced cloud middleware, allowing companies to leverage robust SaaS stacks. This will catalyze the development of new innovative SaaS solutions by drastically reducing the amount of engineering and money spent in building pure SaaS offerings. At the end of the day, it means that the end user will have many, many more SaaS applications to choose from because someone else has helped with the architectural heavy lifting.

Dortch’s Recommendations:

R1: If you are a business technology decision makers pursuing or considering SaaS/cloud-based solutions, find a partner – a reseller or integrator, preferably one with which you’ve worked before – who “gets” your business and how SaaS/cloud solutions are evolving. If you’re a small or mid-sized business, you just don’t have the resources to devote to figuring this SaaS/cloud stuff out without help. And even if your company has an IT department, it might be worth bringing in some outside perspective, and you’re going to have to buy your solutions from someplace. It might as well be someone who knows stuff, rather than someone who just sells stuff. And if you work for a reseller or integrator, make sure your company is asking the right questions and implementing the right knowledge, policies, practices and technologies that will enable it to become such a partner – or consider changing jobs.

(In this context, I highly recommend to users, resellers and integrators the “SaaS 2.0” blog by Dan Druker of Intacct, especially the recent entries on “SaaS & Cloud Computing and the Channel.” And for what is intended as a darkly humorous take on IT teams and SaaS/cloud solutions, check out my blog post, “The Cloud? You Ain't READY for the CLOUD! (Or ARE You??)”)

R2: Once you’ve identified one or more candidate partners, as Ronald Reagan so often admonished his Soviet Union counterparts back when there was a Soviet Union, “trust, but verify.” Ask questions about multi-tenancy, data center redundancy and other critical elements of the infrastructures that will be supporting the services upon which your company relies. And ask even harder and more specific questions about your prospective partners’ relevant business experience and expertise, and their track record in helping companies similar to yours succeed with SaaS/cloud-based solutions. Make sure to record the results of these Q&A sessions, for prospective partner comparisons and because they likely each contain information you can use, no matter which partner or partners you ultimately choose.

R3: When selecting SaaS/cloud-based solutions and partners alike, focus on those that are focused on combining proven and broadly supported underlying practices, processes and technologies. Integration of new solutions and processes with the resources your company already uses and understands is paramount to the success of any new solutions, SaaS/cloud-based or otherwise. And just like you likely don’t have time to become a SaaS/cloud expert and to run your business, few if any vendors or resellers can succeed by inventing and building everything from scratch. So keep an eye on companies such as Apprenda and solutions such as SaaSGrid, of which there will be more. And keep an even sharper eye on how widely supported such solutions become, and what underlying platforms are adopted by the providers of the applications and services critical to your business. (Almost forgot: the Focus.com community is an invaluable asset for relevant observations and discussions here!)

The Cloud? You Ain't READY for the CLOUD! (Or ARE You??)

Maybe you are and maybe you aren't. I mean, I have no way of knowing, really. But I've been hearing...things that are making me...nervous.

I mean, it's not like I'm a conspiracy theorist or anything. (I lean more toward Harry Shearer's thinking on conspiracies, which he has publicly deemed unlikely, given the difficulty of getting people to work together in simple, small teams.) But still, I've been hearing...things...

Things like that there are companies out there for which cloud-based solutions would make a lot of sense, if those companies had processes in place for accurate, fair and balanced evaluation and comparison of such solutions, with one another and with their premise-based alternatives. Or if those companies had IT solution acquisition policies and processes designed with only premise-based solutions in mind.

Now, it's not as if the business IT solutions vendors are making any of this easy. Microsoft representatives have said publicly and repeatedly that delivering purchase and support agreements that gracefully embrace premise- and cloud-based solutions is very much still a work in progress. And Microsoft isn't the only vendor that needs to address this problem rapidly and effectively.

But I can't help but think that IT people who really, really want every dollar of company money they spend to deliver business value would be pushing their companies to become more able to assess, acquire and deploy cloud-based solutions. Unless those IT people had...reasons to complicate or make impossible the assessment and adoption of cloud-based solutions at their companies.

What might those reasons be? Well, I'd hate to speculate. But I remember when minicomputers, PCs, client-server computing, the Internet and the Web were all poo-poohed by IT decision-makers who saw these new technologies as irrelevant to "real" business computing at best and threats to the comfortable status quo at worst. ("Why should I be forced to learn to manage new technologies or vendor relationships when I already understand the ones we have?" I'm just sayin'...)

So is it a conspiracy? Are IT people, individually or collectively, secretively taking arms against a sea of cloud-based threats, hoping by opposing them to end them? (That's generations of Shakespeare fans moaning in the background.) I sincerely doubt it...but I keep hearing these...things...

Anyway, enough of my semi-paranoid, only-partly-tongue-in-cheek ramblings. What do you think about all this? There's a discussion going on right now at Focus.com and another on LinkedIn in the IT Focus Expert Group. Or feel free to leave a comment here, or to drop me a line at medortch@dortchonit.com.