Saturday, May 19, 2007

SaaS Panel Discussion Recap

As mentioned before, last Wednesday I moderated a panel discussion on Software-as-a-Service (SaaS) for IIT-PNW at Google Kirkland campus, an amazing experience. Our panel guests represented broad spectrum of SaaS ecosystem and the audience liberally peppered them with questions on wide variety of topics.

Interestingly, only consensus we had between panelists and audience was that SaaS will grow further and will have significant impact on various business and consumer activities.
  • Defining SaaS. Web 2.0 vs. SaaS. Consumer vs. business focus. SaaS meant different things to different panelists and audience members.

  • Start small. Target small. Improve quickly and frequently. Generate demand quickly. Scale as you grow. Enable experimentation.

  • SaaS strengthens and grows further as web access becomes ubiquitous and available on various devices, specifically growth with internet access through mobile devices.

  • Migration from Software-as-a-Product (SaaP) to SaaS. Benefits of frequent feature enhancements and quick customer feedback. Concerns about accessing data and services offline. Migration from pure web complemented by desktop client option.

  • Most SaaS growth in application area and little in infrastructure area. But greater and quicker adoption in infrastructure area.

  • Main benefit of application SaaS in collaborative namespace. Main benefit of infrastructure SaaS in someone else responsible for muck.

  • Tools and platforms for SaaS development. Doubts about reaching a stage where operating system as SaaS in near future. Concerns on how the evolution in API access will impact the existing integrations in place.

  • Concerns about Security, scalability and vendor lock-in. High switching cost with infrastructure SaaS.

  • Business model - subscription vs. ad supported. Differentiation through service, experience and collaboration.
One of the panelist recounted how he sold his house from retouching images, creating flyer to final selling using only online tools. This reminded me of recent blog post by Phil Wainewright about how Appirio runs its business completely using on-demand integrated application infrastructure.

Panelists believed that SaaS margins will not be as high as SaaP and potentially declining, contrary to McKinsey's expectation of profitability improving as market grows.

Overall a great panel discussion event, thanks to great panelists and engaging audience.

Amazon Simple Storage Service (S3) is being considered a trailblazer and in an enviable position in infrastructure SaaS market. EMC/Unisys initiative shows product vendors caught off-guard with S3 growth.

How will SaaP vendors adopt to SaaS?


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