Over the weekend, there was a press release about a Cisco study that looked at how Web 2.0 technologies and online video affect business, and to no one's great surprise, new social media technologies appear to be improving collaboration. Companies are using video and Web 2.0 to grow business and meet customers' needs. That's not rocket science, obviously -- such is the whole point of these types of technologies.

The study had some other interesting findings, however. More than half of IT decision makers were using these tools with another 25 percent saying they planned to in the near future.

Companies were looking at Web 2.0 investments for a number of reasons as well. The survey responders cited a desire to address customers' demands for innovative products as well as a desire to be more environmentally conscious. Security and cost were the biggest barriers to pursuing these efforts.

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"Cloud computing" is increasingly becoming one of those buzz words of the moment, and as tends to happen with buzz words (or phrases, in this case), it can be confusing to understand exactly what everything is and how the various technologies differ from one another. 3Tera Inc is a company that focuses on utility computing, and I recently got some interesting responses from 3Tera Chairman and CEO Barry X Lynn on how utility computing compares to cloud computing.

For those of us who aren't totally up to speed on the difference, can you summarize the difference between utility computing and cloud computing (in 75 words or less)?

Lynn: That would be analogous to trying to talk about the differences between electricity and a generator. So, I prefer talking about how one relates to the other, rather than the differences.

Cloud computing enables users and developers to utilize services without knowledge of, expertise with, nor control over the technology infrastructure that supports them. It is, almost literally, operating the service in a cloud. That's a good thing, because many companies lack the ability or desire to work with infrastructure. Utility computing, conversely, provides on-demand infrastructure with the ability to control, scale, and configure that infrastructure. At 3tera, we believe that a utility is necessary in order to build a reliable cloud.

How are cloud and utility computing different from Software as a Service?

Lynn: Again, I think it's best to define these things, rather than say how they differ. Software as a Service (SaaS) is, simply, a software enabled service that is offered on the web, on month to month subscription or on a pay per use basis, rather than having to purchase or license the software. Technically, SaaS does not have to be offered in a cloud, but given the nature of the SaaS business model, it's hard to conceive that running it in an environment other than a functional utility or cloud, makes much business sense in most cases.

Are cloud and utility computing closely related to virtualization technology? How do the two mix?

Lynn: Today, it is hard to understand how effective utility and cloud computing can be offered without using virtualization. However, there are many forms of virtualization used in utility computing, from virtual machines, to virtual storage and network virtualization and these still comprise just a few of many required technologies.

As an enterprise, you do not have to be a virtualization user already in order to benefit from cloud and utility computing.

But the true utility computing model is based on virtualization, because this is the way to get all the benefits that come with the utility, including scalability, ease of use, and affordable pricing.

What should people know about trends in cloud computing, utility computing, and virtualization as Web 2.0 (or Web 3.0, depending on whom you talk to) becomes more and more of a factor in the enterprise?

Lynn: SaaS and Web 2.0 offerings are becoming more and more prominent in enterprises, but they are probably the least predictable systems businesses run with regard to volume, resource needs, performance, etc.

Smart enterprises are starting to run these applications in clouds and utilities that scale up and down dynamically, securely linking them to their data centers. As acceptance and confidence in the utility grows, they will start moving things currently in their data centers to the utility as well.

Anything else you would like to add?

Lynn: A lot of companies give lip service to utility computing, but they only offer a small piece of what makes up a true utility.

To use another analogy, if you as an individual pick up a telephone, you get the same dial tone and ability to make calls as General Motors. You just pay less because you use it less.

If you, as a small business, plug something into the wall, you get the same 110 volts 60 Hz alternating current as Microsoft gets. You just pay less because you use less.

Largely, though, that is not true of computing and IT today. Not many businesses can afford to have access and build IT infrastructure that is available to the Fortune 500 companies. A real utility computing platform can change this. It should enable you to affordably have access to, and use of, the same world-class information technology as any Fortune 500 company. You would just pay less, because you use less. Of course, if you use a lot, even enterprise amounts, it's still a great deal. It's all about scalability up and down. Pay for what you need and use. Why would anyone ever pay more than that? You get to deploy applications instantly with infrastructure that grows and shrinks with your business needs."

That's what 3Tera does!

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The annual SaaSCon event sponsored by Computerworld is going on right now in Santa Clara, California. Already, a zillion and one SaaS companies have made important announcements. Have a look at a few here -- and stay tuned for more tomorrow.

• Skura Corporation and Verticals onDemand Announce Life Sciences Industry Partnership
• SensorLogic Launches Service Suite for M2M Applications
• Brainshark Launches Online Marketplace for Business Content
• Pervasive Software Announces On-Demand Integration Platform
• EnterConnect and BEA Expand Strategic Channel License Agreement
• ReachForce Launches OnDemand Product for Website Lead Generation
• Elastra Releases Product for Cloud Computing Management
• Parallels Announces Certification Program for SaaS Service Providers
• 3Tera, Nirvanix Partner for Cloud Computing Solutions

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Over at Michael Krigsman's IT Project Failures blog is a popular post called "Is IT becoming extinct?" In it, Michael Krigsman predicts that, for several reasons, traditional IT departments are on their way out.

Krigsman lists reasons like social media's empowerment of users, availability of well funded SaaS applications that replace in-house IT infrastructures, and IT's leadship being alienated from senior management as reasons why IT will eventually go the way of the dodo.

Of course, not everyone agreed -- users responding to the post had a variety of mixed opinions -- and many predicted that IT departments would change somewhat but not disappear entirely.

Personally, I've noticed that in the case of SaaS applications that claim to replace entire IT departments that a lot of the target customers of such applications are companies that aren't likely to have a large IT department to begin with. In enterprises, SaaS applications definitely have the potential to eliminate some specific responsibilities of IT but probably not the mission entirely, I'd think.

What do you think? Will future IT departments be entirely outsourced? Post your views below.

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San Francisco's WaveMaker Software recently conducted a survey on companies' plans for Web 2.0 in the enterprise. This 5:41 minute podcast with WaveMaker CEO Chris Keene includes a discussion of those survey results.

Be sure not to miss our upcoming roundtable discussion on Web 2.0 and SOA, tomorrow. Sign up today!

Listen to the entire 5:41 podcast Download file

Hi, I’m ebizQ’s Krissi Danielsson. Web 2.0 is very much the buzz word of the moment, and a lot of companies are planning initiatives and otherwise exploring the ways that Web 2.0 can boost business. San Francisco’s WaveMaker Software is a company that makes Web 2.0 development tools, and today I’m speaking with Chris Keene, the CEO of WaveMaker, about a survey that WaveMaker did to find out more about companies’ Web 2.0 plans.

Chris, can you summarize the most important findings in that Web 2.0 survey?

CK: Yes, what we found was that companies very much want to get the benefits of Web 2.0, greater collaboration, the ability for users to contribute more to the overall running of the enterprise, but they’re really struggling with the tools to make these Web 2.0 applications happen.

KD: Okay. So were there any other sort of key findings that you would want to highlight?

CK: What we found was that the vast majority of enterprises -- we talked to about 200 companies that are engaged in large scale IT, so these are global 2000 companies. The vast majority, almost 90 percent, said that they wanted to build even their internal applications as Web applications. But by almost that same percentage, almost 80 percent, they said that their existing tools be that JAVA and J2E tools, or .NET and C Sharp tools, the existing tools were just too complicated to allow them to build those internal business applications easily.

KD: Okay. Would you say there were any surprises in the findings?

CK: Well, I think the big surprise is that even though companies have been building Web applications now for almost ten years, there’s still is paucity of tools that allow what we call non-expert developers to build applications. If you looked back to the last generation of development environments client server, there were a wide number of client server environments that were very effective for non-expert developers to build applications.

There was Lotus Notes, there was PowerBuilder, there was Oracle 4, then Visual Basic. None of those tools have made the transition to the Web and so today, if you’re a client server developer and you’re looking for a way to build basic business applications that can run effectively on the internet even internal business applications, there really are no good choices that exist for building those kinds of applications.

KD: Okay. So do you think that has an important ramification’s for the market?

CK: What we believe is that the whole area of rapid application development and visual development tools is ripe for Web 2.0. I can go onto Blogger and get a blog up and going in five minutes. So clearly, it’s possible to create very powerful software for creating at least certain types of Web applications. And yet, I can't go into some sort of a business tool and point it at a database and see forms on the Web like I could with Visual Basic or PowerBuilder.

KD: Okay. So looking at Web 2.0 overall, do you have any key predictions for the future of Web 2.0 in the enterprise?

CK: I think our predictions is that the overall trend of Web 2.0 is democrazation both of information and of applications. And that within the enterprise what that means the tools that will be successful are the ones that allow people to contribute content in a very democratic fashion, those are the wiki’s and blogs and things like that, but also the tools that allow people to develop ad hoc applications or tactical applications in a very democratic fashion.

So tools that allow the developer to very quickly get started with a Web application. What we say at WaveMaker is “With WaveMaker anybody can be a Web 2.0 rock star”. So the goal is to allow people to develop applications even if they don’t have a great deal of expertise in these complicated technologies like JAVA, and AJAX, and JAVA Script.

KD: All right. Great. And also just as one final question, since ebizQ has an upcoming discussion on SOA and Web 2.0, do you have any comments about a role SOA might play in Web 2.0?

CK: Yes, we think again that SOA in some ways has been too long the domain of the high priest; that the real value of SOA lies when you create services that can be accessed by mere mortals. And so in particular, what we believe is that companies that have adopted, if you will, plumbing for SOA need to find a way to put a face on their SOA strategy and that developments platforms like WaveMaker will be a very effect way to allow non-expert developers to assemble applications based on underlying Web services.

KD: Great; this has been ebizQ’s Krissi Danielsson speaking with Chris Keene, CEO of WaveMaker. Remember for more great resources on Web 2.0, including podcasts, news, white papers, blogs, and other great information, visit www.ebizq.net, and don’t miss the roundtable discussion tomorrow on Web 2.0 and SOA. Thanks for listening and have a great day.

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CMS Wire has a great post about how people often don't understand the meaning of Web 2.0 technologies beyond having heard buzz words.

Marisa Peacock points to how clients often request Web 2.0 technologies to be built into a website without understanding what they are asking for. She suggests that it is more important to understand the underlying technologies than the buzz words, concluding:

After awhile, everything sounds the same and the wrong words get used and misunderstandings arise.

Do you feel that there are too many buzz words in SaaS and Web 2.0? I tend to think so. I'm somewhat interested in posts about this topic, in part because of being a technology editor by profession for a number of years, and it's often seemed to me that most of the buzz words are invented by marketers and widely used by people who don't understand them. In many cases, use of complex buzz words and acronyms can make even the most mundane of technologies sound like something incomprehensible. And this is then what leads to people not understanding the difference between SaaS, SOA, and Web 2.0 and all that stuff -- even if the underlying technologies are different, people's eyes glaze over with the TLAs and buzz words start coming out. It seems like the K.I.S.S. principle ought to apply. A little simplicity might go a long way.

And with that, don't forget that if you're interested in SOA and Web 2.0, ebizQ is having a roundtable discussion on Wednesday that you won't want to miss.

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Colleen Smith, vice president of SaaS for Progress Software recently joined me for a discussion on the trend of SaaS for vertical business networks. Read the transcript or listen to the podcast below.

Remember also that you don't want to miss our upcoming roundtable discussion on Web 2.0 and SOA, coming this Wednesday. Sign up today!

Listen to the entire 13:30 podcast Download file

Hi, this is ebizQ’s Krissi Danielsson. At this point, pretty much everyone would agree that the Software as a Service delivery mode is here to stay, and at this point, most general applications are available in SaaS format from one vendor or another. According to Colleen Smith, vice president of SaaS for Progress Software, the next major trend we will see in SaaS may be a move toward vertical business networks.

So, Colleen, my first question then is can you talk about what exactly it is we mean when we say vertical business network?

CS: Sure. Basically, what we’re seeing is that there’s this new wave or this new era that’s beginning with Software-as-a-Service and as we move from kind of just one application being a hosted application to the ability to have an integrated suite of business services, this era -- this next wave we’re seeing is that large business service providers are beginning to look at the opportunity to bundle smaller ISV offerings.

And what they do is they integrate them and provide an integrated suite that’s very focused on a particular vertical opportunity. And so what they’ve done is create these vertical business networks where they’re now hosting, integrating, and providing access to a community of like users the ability to have access to multiple business applications.

And so the term vertical business network is really just saying that’s an opportunity to have multiple applications potentially from multiple ISVs integrated in a preset way based upon a particular vertical or very specific industry focus.

KD: All right. So would you say that there’s a trend for more and more SaaS applications becoming available targeting vertical business networks?

CS: Yeah. I think that what’s happening is that some of the smaller ISV are definitely looking at this opportunity. I’m not sure if I would say that most are there today, but what I do know is that there are a lot of these large business service providers that I would classify as early adopters that are building out these vertical business networks.

And what they’re doing is they’re looking for a smaller ISVs or these very niche applications in order to be able to provide these applications to their community of users. So what I see happening with the smaller ISVs is that they’re out there looking for new channel opportunities, or if they’re trying to figure out how they can better compete or collaborate in this Software-as-a-Service market.

They’re realizing that maybe instead of just looking at the traditional VARs and resellers that there’s actually an opportunity to look at other types of service providers. And these business service providers that are offering these niche vertical applications to a community of users, especially, the SMB; it really is a great opportunity for ISVs.

So -- and everyone does seem to agree that Software-as-a-Service is going to be more successful, and can be more successful if you can collaborate. And it’s not just about partnerships that we saw, you know, in the old days where I said I was partnering with you, you said you were partnering with me, this is really truly partnerships where there’s collaboration.

And so I think a lots these smalls SaaS providers are figuring out who can I collaborate with and how can I best bring my product to market. So they are looking at it as a channel opportunity as well as just, you know, an opportunity to bring their product to market in a broader market as well as faster time to market.

KD: Alright. So could you talk a little bit more about the opportunities available for this SaaS ISVs and targeting vertical business networks and maybe give some specific examples?

CS: Sure. What I think, you know, what I worked with a lot of ISVs and we’ve got a few hundred at Progress Software that we’re working with right now that have made the transition and it becomes Software-as-a-Service providers. The first thing that I tell them is that they need to kind of step back and figure out where their product and/or service best plays.

And what I mean by, you know, that is that, you know, one other specific business processes that their product addresses and who is the best target market for them. You know sometimes we forget that, you know, especially, if you’re in a traditional software vendor and now you make the transition to SaaS. One of the things that I’m always fearful of is that they’re just going to target the exact same market and just say well, now I have SaaS offering.

And the more successful SaaS providers have been the ones that have that have stepped back and said, okay, maybe I’ve been selling to this market over here, but now there’s an opportunity for me to look at a new market. So if they can -- as SaaS provider, if you can step back, figure out who that best target market is and then determine what are the right business service providers that play in that market.

Say, for example, in healthcare is there a large service provider that is right now looking at an opportunity to integrate multiple applications in healthcare and bring that to market? In the legal sector, is there a large service provider that is looking to aggregate and bring these different services to market to may be smaller law firms?

You know in the oil and gas industry, is there a large player that’s looking to consolidate and bring together a lot of the business applications that are used in the oil and gas industry? Now those three industries I happen to mention are three that Progress is working with right now to build-out these vertical business networks.

We’ve also seen it happen and the travel industry. Where if you think about it more and more, you know, if you’re going to, you know, get a ticket on an airline, you also look at a hotel reservations, car reservations, and maybe even theater or dinner reservations. And if you can get that from a single business service provider, that’s going to be a lot more of interest to you as the user of the system as opposed to having to go to five different portals, or applications, or websites in order to get that information.

And so really that’s the -- the first thing is the opportunity for them to figure out, you know, what is your niche. And that’s really the biggest difference and one of the keys to success in Software-as-a-Service is being able to pick your niche and be the best at it because remember the Software-as-a-Service it’s as much about the service you can offer them as it is about the software.

So those SaaS providers that know their business and have a very specific application that can solve a problem are really going to be the best fit for these vertical business networks to be able to come in and offer their business applications. Now, with the vertical business network needs to then do is have the right SaaS infrastructure that can really focus on the integration of those business applications, the management of those business applications, and the deployment of those business applications to that community of users.

So they’re going to be looking to focus more on an infrastructure to be able to provide the community with the applications, but the smaller ISVs or the small SaaS providers, their real value to the vertical business network are the business applications themselves.

KD: All right. So those sound like some good opportunities then. So given that there’s a trend for ISVs to more and more want to deploy different types of SaaS applications, what do you think are some good points that they should keep in mind, like does and don’ts for targeting this opportunity?

CS: Sure. Well, the first thing I’d say if, you know, for the smaller SaaS ISVs, is the first thing is you know think outside the box. I think especially if you are a traditional software vendor making the transition, you know. There are a lot of opportunities for partnering and collaborations and it’s not just the traditional VARs, SI’s and resellers.

So you know the first thing, I think, you know, my recommendation would be don’t just go to your existing channel. It might end up being that your channel there would be an opportunity, but if you kind of step back and think about, you know, if your application is in the automotive or in the construction, or in the travel, or in the newspaper publishing industry, think about who the large service providers are in that industry, and who some of those smaller organizations might go to for a full suite of services.

So that’s the first thing. Think about, you know, step outside the box and think about these partnership opportunities. The second thing I often tell ISVs is make sure that your offering is able to handle the workflows and integration because if your application is today just to a standalone application, you know, the challenge with being able to move into a vertical business network is its now just not going to be the only application that the end-user’s going to be using.

And so a lot of SaaS users today, you know, one of the things they’re disappointed with is the level at integration that’s offered by a SaaS provider. So one of the things they can do from a product perspective is make sure that their product can be easily integrated. It’ll still be their responsibility of the vertical business network to make sure that their application can work with the other applications, but as an ISV, you really need to think in terms of how easy your application can be integrated and work from a workflow perspective with other applications.

The other thing about these vertical business networks are they kind of the biggest challenge is going to be the, you know, the SaaS infrastructure requirements. And, you know, the only way that vertical business networks will be successful in the long term are if, you know, the service levels that they’re able to provide to these community of users stand up to was the service-level agreement or that they’re providing to their customers.

So things like, you know, process management and an orchestration, overall service-level management, and governance, and of course, security is still going to be one of the key components that, you know, the community of users are going to look at because these are all going to be multi-tenant environments so multi-customer are going to be accessing potentially the business code and business logic.

And so what needs to happen is the vertical business networks provider needs to make sure that they’ve thought through the security, the access, and the controls. And so it’s not going to be, you know, it’s not necessarily an easy thing to build a vertical business network but the keys to success are going to be that have the right infrastructure built along with picking the right partnerships with these smaller ISVs.

And if they can build on an environment that would be something that a small to medium-sized business never would’ve been able to build out themselves because of the costs associated with it and because of the IT requirements associated with it, then they end -- the end result will be success on both sides.

The ISVs will be able to sell into a new market and sell an integrated solution into that new market. And the vertical business network providers or these large business service providers will be able to target that SMB market that always has been something they wanted to but the price points and the in the IT requirements always kind of kept them from being able to go after that community of users.

And the community of SMB users will start to get business applications that they can really afford but also have the capability their larger enterprises and have been using, you know, for a number of years. And so it really could be a win, win, win, you know, as long as all of these other things are thought of upfront in terms of the infrastructure, and the applications, and the end user requirements as well.

KD: Great! We’ve been talking with Colleen Smith, VP of SaaS with Progress Software. Remember for more podcasts, blogs, white papers, news, and more, you can visit www.ebizQ.net. Thanks for joining us and have a great day

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In an article in Times Online, a UK-based tech publication, Tim Berners Lee is quoted as saying that Google could eventually be displaced as the leading brand of the Internet by Web 3.0 style technologies.

Specifically, Berners-Lee believes that the semantic web could be the thing to do this, eventually connecting people to all sorts of information. Whereas Web 2.0 involves connection of people to other people via the Web, Web 3.0 would involve connecting people to any type of information in an almost sci-fi like manner.

The article has some interesting stuff. Of course, an obvious interesting point about all this info linking brought up in the comments is the security risk that could be posed by having certain information too readily available.

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Most companies need a number of spreadsheets for a variety of reasons, and they can then end up with something of a sprawl problem, says Adaptive Planning. Adaptive Planning is a company that offers on-demand budgeting, forecasting and reporting solutions -- and they claim they can eliminate the problem of Excel spreadsheet sprawl.

William A. Soward, CEO, Adaptive Planning recently answered some questions about this claim.

How exactly does Adaptive Planning eliminate the problem of spreadsheet sprawl?

Soward: Adaptive Planning presents an on-demand, web-based alternative to budgeting, forecasting, and reporting in Excel. Traditional spreadsheet-based financial processes are slow, error-prone, inherently non-collaborative, and inflexible. As a result, budgets are out of date by the time they are completed, re-forecasts cannot be performed quickly with any degree of thoroughness, strategic what-if analyses are done "back of the envelope," and reports on actual financial performance are not distributed outside of finance and the executive team. Managers do not have the information they need to make well-informed decisions, and therefore operate at a significant competitive disadvantage.

While these problems have been obvious for decades, companies have not had a practical alternative to spreadsheets.mAdaptive Planning bridges this solution gap with an on-demand, web-based budgeting, forecasting, and reporting solution that is optimized for midsize companies and corporate divisions. Companies create their financial models using Adaptive Planning?s familiar, Excel-like user interface, and then provide access to all users via a web browser. Consolidation headaches are eliminated, and cycle time are dramatically improved, since accounts and sub-plans automatically roll up to the corporate plan. Customers often see 70% or more reductions in planning times -- from months to weeks. Errors are eliminated, since cell references and macros can not be broken. High-quality, thorough, and collaborative re-forecasts and what-if analyses can be handled with ease. And self-service reporting, analysis, and dashboards can be automatically delivered throughout an organization.

Where does the data reside with this tool? Is it possible to use Adaptive Planning when accessing data that is also stored locally? (would the two databases need to be synchronized or does it work from a local database)?

Soward: The data resides in the Adaptive Planning database. Yes, Adaptive Planning typically includes, via integration, data that is stored locally, such as actuals data from companies' GL systems, or headcount data from their HR or payroll systems. For on-demand customers, the Adaptive Planning database is located in a secure, third-party data center. For on-premise customers, the Adaptive Planning database is local. In both cases, integration capabilities synchronize source systems (GL, HR, etc.) with the Adaptive Planning database.

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Zoho's been busy lately. Last week they announced new mobile support for Zoho Writer on their blog and just today they also launched Zoho People, an app for HR management.

In Zoho's blog, Zoho's Raju Vegesna posts about Zoho People today, explaining that it has modules for organization, recruitment, forms, checklist, self service, and roles and permissions and he links graphics and videos that explain the application further.

I received some email responses from Vegesna last month about industry issues as a whole pertaining to SaaS after Vegesna had commented on expected functionality in Microsoft's Office 14.

What is your opinion of the claim that most SaaS MS Office alternatives are not ready for prime time? Are there instances where most companies truly do need something like MS Office?

Vegesna: The current versions of MS Office alternatives are not Enterprise ready. But they certainly are Business/SMB ready & consumer ready. It doesn't mean that they won't get there. These online offerings will be enterprise ready in a few years. Today we see departments in enterprises using online offerings. This will continue to grow and in a few years we will see enterprise deployments of these online apps. Even today we are seeing some early adopters implementing pilots in their enterprises. This will be a norm in a few years.

Do you think Microsoft will face increasing pressure to make a true SaaS version of Office as the other SaaS alternatives continue to mature and offer lower costs?



Vegesna: Sure. They will face increasing pressure. I expect them to deliver some form of online offerings and of course I can foresee a price cut due to the pressure from online alternatives.


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With much of the hullabaloo over SaaS targeting small businesses, it was interesting to read a viewpoint in BusinessWeek this week, written by small business owner Gene Marks, in which Marks named SaaS and several Web 2.0 technologies as being in the "top 10 tech trends to ignore."

In his opinion piece, Marks makes the case that most small business owners will be leery of SaaS and not too trustworthy of the Internet always being reliable -- valid points that some of us probably tend to forget when working from buildings with always-on high speed DSL connections.

Marks also names virtualization, social networking sites, the Microsoft-Yahoo deal, and virtual worlds as being either pointless or not yet developed enough for small business owners to care. He points out (correctly, I think) that sites like FaceBook and MySpace don't really have built-in audiences for products and that virtual worlds are pure nonsense.

I thought Marks illustrated pretty well how sometimes marketers may end up being a little far removed from their audiences. Small businesses may not have dedicated IT departments and resources to play around with these new technologies.

What do you think? Does Marks have a point? Post below.

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I think most of us would agree with a blog post by Sean Voisen the other day at Sys-Con Media in which Voisen wondered whether or not "RIA" was a ploy to keep dictionary makers in business. The new TLA, which stands for Rich Internet Applications (as if you didn't already know that), is popping up in more and more conversation lately.

The tech industry does seem to go a little nuts with the acronyms, I think. Given the three or four different definitions of TLAs like "ASP," I truly do believe that acronym overuse complicates more than it helps. Sometimes it makes sense, but a lot of the time it doesn't. A few months ago, I also posted about how use of "-aaS" acronyms for various things "as a service" seems to be going overboard with a veritable dictionary of XaaS terms.

But more importantly, in Voisen's post, he makes a really good point about how language can be limiting -- particularly in this quote:

The problem with language is that it is inherently limiting. As soon as you put a label — a word — on something you must limit it. You must box it in and try to make it conform to the definitions and properties prescribed by the symbol you have given it. But the thing itself is not the word. It is not the symbol.

He then muses that by inventing new words for ideas that don't exist yet, we run risks of boxing ourselves in, and he asserts that we don't really need to invent new words for everything in order to have these discussions.

As always, post your comments below if you have thoughts on this.

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After announcing plans to offer three solutions in SaaS delivery format, Silicon Valley-based Serena Software says it is also committed to using SaaS internally whenever it makes sense -- and the company has already gone a long way toward that goal. Rene Bonvanie, a senior vice president with Serena, joined me for a conversation about the company's internal SaaS use and why SaaS is as good for the enterprise as it is for SMBs.

Remember that if you are interested in SaaS or other Web 2.0 subjects, you should sign up for ebizQ's SOA and Web 2.0 roundtable discussion, scheduled for March 19.

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KD: I'm ebizQ's Krissi Danielsson. Software as a Service, a.k.a. SaaS, is obviously gaining traction in the marketplace. A lot of the buzz about SaaS tends to center around how well it works from small to mid-sized businesses, but more and more enterprises are also finding benefits in using a SaaS approach. One of those enterprises is Serena Software, a Silicon Valley company that makes application lifestyle management tools for the enterprise.

Here today is Rene Bonvanie, senior vice present with Serena Software, to discuss how Serena uses SaaS internally. Now Rene, let me me start by asking...can you tell me the rationale behind Serena's decision to use a SaaS directed approach internally?

RB: Well, the question is answered in two different ways. The first way I would answer the question has to do with the economic rationale of why to use SaaS. Serena is now is a company that does roughly $300 million in revenue and it has about 800 employees throughout the world. And at that size, it is not the best thing to actually run a -- an IT department that has all of the knowledge necessary to run an operation this size.

So we’re a typical, I would mid-sized company that has all the complexities of having to manage a lot of locations, and a lot employees, and a lot of processes, and yet we don’t have really the funds to do that. We also have, I think, a complexity in our business that has to deal with as a global nature of what we do and therefore, when we do business in Europe or in Asia or in North America, it -- it is necessary to have everything and everyone connected to -- to do that so the systems need to speak with each other and -- and moreover they need to be available 24/7.

Now if you think about that, and we’re not very unique in that, SaaS becomes interesting from an economic perspective because it gives us Software-as-a-Service that is good enough for a company our size, has the functionality and the accessibility that we need, has the availability that we need. It’s up 24/7; it’s something that runs in highly well-managed and data centers and so forth. So all the things that we couldn’t possibly afford as a company ourselves are made available in SaaS.

Now, the second way to answer the question has more to do with a firm belief that we have at Serena that everything will end up in the cloud, so to speak, in SaaS. Now, that partially reflects, of course, on what we are doing but we see an industry that everything is moving into a SaaS model. Why?

Well, because you look in the past of where every kind of business process or every kind of technology has ended up. It has always ended up in very large shared models, whether it’s telephony, whether it’s electricity or gas, it’s everything moved into a grid of some sort and into a shared model. That is because the economics were better, the quality of service is better, and the connectivity is a lot better.

So we believe that SaaS is more than just a -- an economic reason, there is actually a -- a very intrinsic way that we believe every model will end up. Now, we also believe that it will take some time. Every question that has ever been asked about well, is my information secure, is not -- is not new because back in the days when people started using banks instead of putting things under their own mattress, they believed it was much more interesting and secure to put it under their own mattress than, so to speak, under someone else’s mattress.

But banks have become really good at managing money and, in fact, money it’s all being a proxy already. You can imagine that today, no one in their right mind would not have their money in the bank and therefore, it has become very accepted. That took a while but today that’s a very common model. And very few people have pumps and/or generators in their backyard unless they really, really have to, which is -- which is -- in places where there is not network available to get to those resources.

So we believe that the -- the SaaS has come to maturity at this point where a lot of the applications that companies need are available. These applications are enterprise ready; there are SaaS offerings some of which we use as a company. They have hundreds to thousands of people worked on it. In other words, much better scalability, much better security. If anything, any company in the world is -- was running and so we truly believe it’s ready. And we are making a move just a fast we as think that everyone else will.

KD: All right. So how well would you say that the Software-as-a-Service tools are working for you so far and was the deployment smooth or any internal resistance to the change initially?

RB: Now, you have to understand when I answer this question that I -- I firmly believe that SaaS did more than just making the same things available in the -- in the clouds so to speak, it did a lot more. It actually did some things that I believe is crucial to most enterprise software which it had made it easier to use for -- for employees.

So with SaaS came another phenomenon called “shared service” and ease of use. So rather than having a few people enter, let’s say opportunities into a CRM system, everyone now starts to put things into the CRM system. Instead of being a few people enter expense reports; everyone started putting expense reports into the system. So the shared service model was very -- integrated into that SaaS approach.

We have adopted these tools rapidly. How well do they work? Well, they actually better from the perspective of the end-user. So let me give you an example. If an end-user has an expense report, who do they trust most to put into that information? Well, you’d say themselves. What if they are not in the office but on the road? Well, say you’re a sales rep and want to do that. How do you do that? Well, you do because there’s a -- a way to do that on the Web.

So the Web has produced a whole new thinking on about where you do things, and how you do things, and how easy it is to do things, and that has very much worked its way into the SaaS offerings. So what we didn’t do is take an existing application and just put it on the computer in someone else’s data center and then therefore thought we were done with the -- the thing. We actually changed that existing hard-to-use complex applications and replaced them with simple -- simpler applications that all have the shared service model.

That is really what we did with SaaS. Now, are they -- are they working well? They’re working extremely well. I mean we run a $300 million business on them and I know of many other companies that run smaller and larger businesses on these SaaS tools. The planning is actually interesting phenomenon because the first thing you always want to make sure, I mean, coming from an IT perspective is that it integrates well.

If you’re coming from a user’s perspective, you’re coming from the perspective that you want it work well for you. So easy to user and so forth. SaaS, initially, was very focused on that second phenomenon, making the users happy. Simple software that was not going to be resisted by the end-users, which by the way was a very big problem with a lot of enterprise software.

And you -- you ask people how successful were rolling out SAP or -- or Siebel in the ‘90s to large community of users and, categorically, you would hear about failures of adoption. But it was -- it was astounding that people put in tens of millions of dollars of these enterprise software packages and the -- and the business user, the sales people, the marketing people, the finance people weren’t using them.

With SaaS, it -- it -- I mean, it focuses a lot on making that very complex stuff easy and fun to use and a lot of SaaS vendors have been very success doing so. The IT perspective came in a little bit later, which is -- so now -- is SaaS is a new island that people are creating or does it work well? So for example, if you put in an on-demand CRM systems like Salesforce or SugarCRM.

Does it communicate well with your CRP system, Oracle, SAP, or JD Edwards, or Lawson, or even QuickBooks for that matter in -- in exchanging information between what customers want to buy from you and what customers actually have bought from you? Now, -- now, that has been addressed over the last number of years as well and certainly helped by a lot of innovation in software-oriented architect -- in service-oriented architectures and so forth. We’ve massive innovation there. So the tools work well for the end-users, they also now work really well for the actual departments who actually need integration.

KD: All right. That sounds good. So are there any on-premise software applications that Serena has not been able to replace with SaaS and do you anticipate SaaS being able to replace those in the future?

RB: So today, there is fundamentally no application that we have that cannot be done in -- in SaaS. We had made the assessment a while back and fundamentally for everything that we need to do as a company from payroll, to telephony, to CRM, to financial, and so forth, everything -- everything we do is -- there is a SaaS opportunity. And clearly, we have done a lot it already.

Today, we’re still running a -- an on-premise version of SAP but we’re also managing it ourselves so it is -- it is a managed service. So it is kind of half-way there and in the SaaS -- in the SaaS world and that we don’t run that on our own computers, it would be managed by a -- by one of our business partners. But if you think about it, I mean, we -- we run pretty much everything else that we do in SaaS.

And the telephone I speak to you over is run through a SaaS offering from Avaya. The CRM system that we use is run by Salesforce.com. The anti-spam that is it governing our email is run by -- by Google and is, in fact, our email is soon going to be run by Google. We use Facebook as our intranet so we don’t have our intranet we Facebook as our internet. We use BroadCo for own video services. We use LucidEra for our business analytics. These are all SaaS offerings.

So our IT department and our server room is pretty darn small if you think about it because all it needs to be is a big part onto the internet so that we can tap into all these services and -- and do our business. And -- and I think a lot of server rooms will be very, very empty soon because those servers don’t run in our own buildings anymore, they run in very large, well-managed shared data centers like somewhere in West Virginia, somewhere in -- I don't know, somewhere I don’t even care so much about where it runs, but it runs with a service level agreement that is inherently much better than what I can do with my IT budget.

KD: Any thoughts on the idea that on-premise software will always be necessary for one reason or another? Some companies seem to be putting that forth in the media.

RB: Well, there are two reasons why on software -- on-premise software will continue to survive. And one is that not every application will end up in SaaS. The -- the way that SaaS vendors sort of speak can operate it is because they can provide kinds of skill. There are many applications that are applications of one. If one company or a small amount of companies run an application that is highly proprietary and it doesn’t really make sense to put into a shared model because the economics would never work.

Now, in the late ‘90s we saw a phenomenon called “ASP” where someone else tried to take on the complexities. So instead of let’s say Bank of America building a -- a large data center. Exodus tried to build a large data center and kind of moved the complexity of running that application from Bank of America on to Exodus. The problem was that there was no economies of scale. The only thing that was shared was the floor space.

Now, that is not a very interesting economic model and all those companies, as you know, went out of business because there -- there was no money to be earned. Now, in SaaS, there is a large amount of applications that whether I do them or not I can't really compete on them. I can't compete on my implementation of a CRM system, or by implementation of a financial management system, or a manufacturing system, it just has to work and so all those applications will go first.

Then what you’ll see is that there are somewhat more practical applications that will go. And then what remains are applications that are highly proprietary, probably, very different seating that will not end up in SaaS. But there - -there are many applications; many that do not need like a special treatment. And what what SaaS has done is made a lot of people realize that all the stuff that’s put into building its own application actually wasn’t all that necessary because there was a good alternative, good enough alternative, that was more affordable and, in fact, much better to work with.

KD: Great! This has been a discussion with Rene Bonvanie, senior vice president with Serena Software. For more great podcasts, white papers, blogs, news, and more on SaaS, Web 2.0, and SOA, be sure to visit www.ebizq.net. Thanks for listening and have a great day!

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Microsoft has made an important announcement from its annual SharePoint conference: it is expanding the online versions of Exchange and SharePoint applications and will today unveil the new offerings.

The IT media is ablaze with discussion of the importance of the announcement, especially after a few days of speculation that Microsoft would expand its SaaS offerings in some way. IT Week posted a brief commentary noting that SaaS has been posing an increasing threat to Microsoft with every month that passes but pointing out that managing the transition could be challenging. IT Week quotes Gartner's Matt Cain as saying:

Microsoft is retrofitting its existing software to the multi-tenant server model. It won't be until the next version of Exchange (due in 2011) that its core products are better architected to run in a multi-tenant SaaS model.

ZDNet's Larry Dignan has posted an insightful commentary, summing up Microsoft's current and past efforts pretty well as, "If you’re the software giant the game plan is to turn SaaS and the cloud into a feature." He says that many were disappointed with the announcement, as they had hoped for a cloud version of MS Office after the buzz that had been growing. Dignan concludes that Microsoft's cautious SaaS strategy might look like a mistake decades from now but that for now it could be viewed as a hedging of bets.

InfoWorld's Paul Krill also summarized the announcement but made the distinction between the new services that Microsoft would offer with SharePoint vs. what it would gain if it succeeds in acquiring Yahoo. Krill quotes Microsoft'sKirk Koenigsbauer as saying:

"They're used for what's called enterprise search, which is search inside the firewall," Koenigsbauer said. Users could, for example, search for an employee claim form, a Word document, a report, or a map of a building on the corporate campus. "A single Search Server can crawl up to 50 million documents in what we call the index."

What are your thoughts on the new announcements? Be sure to post your comments below.

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This morning, WaveMaker announced results of a survey it had conducted about businesses' plans for deployment of web-based applications. In the survey, WaveMaker found some interesting results.

Of more than 200 businesses surveyed, 71% of respondents answered that they were currently supporting or planning to develop internal applications that they would prefer to launch as web-based applications. The most common topic of interest was portable frameworks, with 60% of respondents indicating interest in that as compared to 20% in content management systems and in wikis.

In answering about the greatest challenges in making these changes, companies cited reasons such as time to develop new applications, lack of ability to meet demand, lack of staff know-how, and issues with legacy applications.

Although the wording was vague on some of the questions, making it hard to say exactly how definitive responses can be considered, this survey makes for yet another sign that businesses are slowly but surely accepting Web 2.0.

And remember, if your company is considering Web 2.0, you should attend ebizQ's SOA and Web 2.0 roundtable discussion, currently planned for March 19.

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