Category: Customer experience
October 29th, 2009
Cloud cuts everyone's cost of ownership
Speaking in the opening keynote of SIIA OnDemand in San Jose this morning, SuccessFactors CEO Lars Dalgaard let slip a statistic that set several attendees a-twittering. He revealed that the SaaS provider’s multi-tenant application infrastructure supports its 2,850+ customers and 5.4+ million users on just 150 servers.
The ability to achieve such enormous economies of scale demonstrates the huge power of multi-tenancy and gives the lie to the line, so often peddled by the conventional on-premise software vendors, that SaaS is just a delivery option. SuccessFactors would not be able to run its operations with anything like the same low overhead if it had to separately maintain the ability to ship on-premise instances of its software.
The conventional software model perpetuates a scandalous wastage and duplication of resources. Every single customer of an on-premise platform or application installs their own custom implementation. Every one of those implementations builds in enough spare capacity to support unexpected usage spikes and peak load at the organization’s busiest period of the year — yet remains idle the rest of the time. Its IT staff acquire a huge store of learnings and experiences that are solely revelant to their own environment. All of those needless investments and expenses are replicated across thousands of an ISV’s customer base. The aggregate waste adds up to a burdensome cost of ownership spread across its customer.
With SaaS, the customer base shares a single infrastructure, eliminating Read the rest of this entry »
October 16th, 2009
How to avoid the amateur cloud
Someone this week asked me, what’s the cloud equivalent of SoSaaS? What do we call it when people take outdated data center management practices and label them as cloud computing, even when they fall far short of what’s required? We already have the name, I replied, thanks to the events of the past week: amateur cloud.
There’s going to be a lot of amateur cloud in the market for the next few years, and businesses of all sizes will have to be intensely wary of the pitfalls when they go shopping for cloud services. Amateur cloud won’t be easy to spot, and often it’ll be operated by huge, reputable companies with long, honorable track records in computing and data center operations. In many cases, businesses will knowingly choose amateur-cloud providers for reasons of cost or habit. As a result, the transition to the cloud computing era is going to be lengthy, troubled and painful.
The past week’s Sidekick debacle has been an object lesson in the full perils of amateur cloud. The hit to the reputations and brand image of Microsoft and T-Mobile has been massive. To its credit, Microsoft has pulled out all the stops and seems well on the way to recovering the lost user data, which will go a long way towards restoring its cloud credibility. But at what cost? — not only in direct resource costs but also the unseen cost of top-level crisis management that has had to be devoted to the rescue exercise. One silver lining (though scant comfort for those who suffered directly) is that every such failure has the welcome side-effect of driving home to all cloud providers the risk exposure that amateur cloud represents. Many will now be re-examining their vulnerability and tightening up procedures or strengthening their infrastructure, all of which helps raise expected operating norms a few notches higher.
One can’t help feeling sorry for venerable, established players like IBM, berated by Air New Zealand’s CEO for last week’s data center outage, and Hitachi Data Systems, caught up in the incident that caused the Sidekick data loss. As several of the Talkback commenters to my previous post have argued, it’s not as if they’ve done anything different from what they’ve always done in the past. They weren’t even attempting to operate as cloud computing facilities (although Sidekick’s users certainly regarded it as a cloud service and trusted it as such).
Yet somehow in the space of a few short months, the world has changed. Suddenly, every online service is being measured against cloud standards. What was once Read the rest of this entry »
October 12th, 2009
The cloud: no place for amateurs
The boss of Air New Zealand has given us a convenient term for companies that can’t get to grips with the realities of delivering computing as a service: “Amateurs”. His reported comments were addressed to IBM, which failed to restore operations at a mainframe data center in a responsive enough fashion after a major outage on Sunday:
“In my 30-year working career,” he reportedly emailed the hapless vendor, “I am struggling to recall a time where I have seen a supplier so slow to react to a catastrophic system failure such as this and so unwilling to accept responsibility and apologise to its client and its client’s customers.”
T-Mobile is another reputable company left looking amateurish today after the catastrophic loss last week of all user data stored on its Sidekick service. But the real amateurs behind this story appear to be Microsoft and Hitachi, who are believed implicated in a server failure that took out both the production and backup databases on the storage network where Sidekick data is stored.
To read a contrasting story that shows how cloud outages get handled professionally, check out Michael Krigsman’s post last week about the recent 15-hour outage suffered by on-demand ERP provider Workday. Here, too, a network storage device caused a total meltdown, shutting itself down when it detected a corrupted node in a backup disk. Workday avoided Sidekick’s fate by invoking its disaster recovery plan. It avoided IBM’s fate by acting rapidly and going out of its way to keep its customers informed.
As I’ve often written in the past, big, established companies frequently over-estimate their competence at cloud computing and SaaS, simply because they fail to realize it’s far more than just a repackaging of what they already do. Unfortunately, their inability to grasp the emerging as-a-service business model and the demands of cloud-scale computing leave them performing like amateurs. The pity of it is, their arrogance and incompetence undermines trust in all cloud computing providers, even those that take their responsibilities seriously.
October 5th, 2009
The as-a-service business model
It’s interesting to see other industries taking a lead from SaaS and learning lessons from what I’ve started calling the ‘as-a-service’ business model. Especially when you consider that most ISVs still haven’t the least idea what SaaS really entails.
An article republished yesterday on paidcontent.org is by guest author Mika Salmi, former president of Global Digital Media at Viacom/MTV. Time To Change The Lens: Media As A Service discusses the impact of digital distribution on the media industry and argues that the software industry’s transition to SaaS illustrates what lies ahead:
“Shipping or downloading a static physical or digital product is a dying business. Pioneers like Salesforce.com, and now Google with their office apps, are showing how a ‘product’ is not a discrete thing. Rather, it’s an ongoing relationship — with continuous updates and two-way communication — with customers and even between customers.”
Sometimes it takes someone outside our own industry to be so clear-sighted about what’s happening within it. Salmi gets right to the point without getting distracted by discussions of virtualization or subscription pricing. He identifies the core of the as-a-service business model as being the way that it changes relationships with customers:
“This is not just about putting up a pay wall and charging a subscription fee … The ‘S’ in MaaS is not an afterthought or tacked on, it is the entire ecosystem attached to the content.”
If only there was so much refreshing clarity within the software industry, where, as I mentioned in my last post, most people seem to believe they can simply plonk their existing software on the Web or into a pay-as-you-go subscription plan and be successful without having to make any other changes to the way they do business. The as-a-service business model is much more than that, requiring a real-time service infrastructure and culture, able to interact with and respond to the needs, interests and dynamics of customers and their own connected networks.
September 24th, 2009
Why you should be glad about Gmail failures
Gmail is having problems again today and some users are squirming while others aren’t worried.
Of course it’s a hassle when Gmail’s not there any more — I found my work rhythm was interrupted and instead of writing and sending some emails as I’d planned, I had to switch to another task and they’re still sitting on my to-do list now. But the way I look at it, every Gmail outage is a small investment I’m willing to make towards a future when I’ll be able to take its reliability utterly for granted.
With every Gmail fail, Google learns more about operating a cloud-scale, enterprise-class email infrastructure. While it may be true that Hotmail and Yahoo! Mail have more registered users and traffic, neither of them are trying to attract enterprise customers as Google is with its Google Apps suite (of which Gmail is the flagship application). That means no one has ever attempted what Gmail is now doing, and with each slip-up along the way, it learns how to do it better.
Remember the big outage that affected the Gmail web interface on the 1st of this month? Read the rest of this entry »
August 17th, 2009
How mobile networks flunked my summer roaming spend
O2 and Vodafone could each have made an extra $100 or more from me this summer and doubtless from hundreds, maybe thousands of other travelers. But their antiquated billing systems and inadequate demand forecasting have cost them my business and hammered a further nail into the coffin of whatever scant vestige of customer goodwill they had left.
Let me start with O2, the holder of the UK iPhone monopoly (though soon to face Orange as a competitor, it’s rumored). Data roaming charges are a punitive £6 ($10) per megabyte outside of Europe and a still-scandalous £3 ($5) per megabyte within the European Union. The only way to bring data roaming into barely palatable realms of affordability is to buy a 50MB ‘bolt-on’ package for £50 ($84) prior to traveling, thus reducing the cost to £1 ($1.67) per megabyte. Over the past year of iPhone ownership I’ve got used to activating the 50MB bolt-on in advance of journeys abroad and then canceling it once my trips are over. Perhaps misled by the name, I had started to imagine that it might be possible to add a further bolt-on mid-trip should I find myself approaching the 50MB tariff ceiling prematurely.
No such luck, I discovered, when I phoned up to activate data roaming for my family vacation this month. It turns out the 50MB is a monthly ration and, since I was phoning up several days after the start of my billing period, I could only secure a pro-rata 40MB of £1-per-megabyte data roaming for the current month. Furthermore (and at this point I understandably went up the wall into the poor call center agent’s earpiece), since the ‘bolt-on’ had to be activated for a full monthly billing cycle, I would have to pay a full £50 charge for the following month (when I have no journeys abroad) before I could cancel it, thus jacking up the charge to an absurd £90 for a measly 40MB of data roaming while I was actually traveling.
After putting up with my extensive remonstrations, the agent got authority to waive next month’s charge, but I was still left fuming at the total mismatch between what O2’s no doubt hugely expensive billing system is able to handle and what I as a consumer actually need and want to do. This notion that there is a 50MB roaming entitlement that is spread across a billing period is clearly Read the rest of this entry »
June 24th, 2009
LucidEra's demise is about money, not SaaS
I’ve been struck by the contrasting reactions to two separate company shutdowns that have taken place this week.
It emerged on Monday that SaaS business intelligence vendor LucidEra emailed customers late last week to inform them the company will cease operations at the end of this month. Immediately there was a flurry of blog posts debating what this meant for the future of SaaS and of SaaS BI in particular. Tech journalist Christina Torode even wrote that LucidEra’s demise harkens to ASP downfalls.
Monday also brought the news that Clear, a subscription service that operates fast-track security lanes for frequent travelers in a number of US airports, had abruptly ceased trading. No one blogged that its demise raised question marks over the future of business services sold on subscription, nor whether the notion of commercially operated fast-track channels was simply not viable (indeed many speculated who might enter the market to take Clear’s place). This was simply seen as a story about a company that couldn’t renegotiate a crucial loan, and went under.
LucidEra, too, simply ran out of money, and it is fatuous to attempt to draw any broader conclusions about the state of SaaS or SaaS BI from its demise. Darren Cunningham, LucidEra’s VP of marketing, was contacted by phone Monday and Read the rest of this entry »
May 15th, 2009
B2I is the new Web opportunity
A new class of buyer is emerging on the Web that doesn’t fit the classic divide between business-to-consumer (B2C) and business-to-business (B2B). Most companies think of their market as either one or the other, but to divide the world unthinkingly into B2C and B2B ignores the reality of the Web today. We must start taking account of an emerging segment that I call business-to-individual (B2I), made up of people whose online purchasing methods are identical whether they’re buying for personal or business use, and who are just as likely to be buying for business from home in their spare time as they are from the office during working hours.
In the past, the channels you’d use to reach business buyers — trade shows, specialist publications and direct selling — were distinct and separate from the mass media that touched consumers. As a result, it was natural to think of them as completely separate populations, even though many of them were the same individuals, buying B2B products in their jobs, and then leaving work to become consumers in their home and leisure time.
The Web is overturning this increasingly spurious demarcation, on both sides of the interaction. B2B and B2C sellers alike reach their buyers via the Web, because their users turn to tools like Google Search or TripAdvisor both at work and at play. Social media in particular is blurring the boundaries between business and consumer behavior, precisely because of its emphasis on the individual as a person — encompassing work, home, outside interests, feelings and daily routines.
This may come naturally to Generation-Yers, but many older business people feel uncomfortable crossing those boundaries, as John Hagel notes in a blog post today, What Does Your Facebook Profile Say About You?, in which Read the rest of this entry »
May 5th, 2009
Web giants and the helpless individual
Like many users of technology today, I have developed an essentially dysfunctional approach when things don’t work properly: I do whatever it takes to avoid fixing it. I wait to see if it ‘fixes itself’. I make a workaround. I live with it till the next upgrade. Or I just use something else. It’s only when I absolutely can’t function without resolving the problem that I take a deep breath, grit my teeth, and embark on the quest to find a solution.
My worst nightmare is to find myself in the kind of situation frequently described in anguished blog posts by victims of Google, Amazon or eBay glitches and terminations. I’ve been collecting a few samples recently:
- When Amazon fails, it does so big time ranted fellow Enterprise Irregular Dennis Howlett last weekend after an ill-fated attempt to buy a high-spec digital camera from the online retailer. A security exception on his order triggered a defective process that closed his account with no viable means of getting it reopened.
- Nobody Can Hear You Scream If Your RSS Feed Is Dead wrote Louis Gray back in March when a glitch at Blogger wiped out his entire RSS feed, including all archives (among other casualties of the same glitch, Kent Newsome provided an entertaining and informative account).
- Google is Evil, Worse than PayPal: Don’t use Google Checkout for your business wrote Amy Hoy later the same month when her website’s Checkout account was disabled with no notification, no explanation and no appeal.
- Don’t ever use Google Apps for anything important, wrote an anonymous poster to the Business of Software discussion community in January after being “stuck in this kafkaesque place” that is Google Apps support. [Updated 5 May at 22:52. An earlier version of this item incorrectly attributed the comment to Joel Spolsky, who is not having any problems with Google].
- Hello, Google, is anyone in there? I wrote last summer after several incidents when Googla Apps users were locked out of their accounts with no information.
As is the norm when these mass-market automated online services fail, the victims Read the rest of this entry »
February 27th, 2009
Automated PaaS migration now a reality
The first reports of Coghead customers having successfully transferred their applications to a new platform are starting to come through. Caspio, which was first off the blocks with the offer of a migration deal within hours of Coghead announcing its shutdown, is today unveiling its first completed migration. Hawaii-based health agency Quality Behavioral Outcomes took just days to migrate several “mission-critical” database applications and has already decided it likes the new platform better than Coghead, according to Todd Addleson, director of behavioral services.
That may seem like pretty fast work — a tribute to the rapid time-to-result that such platforms are designed to achieve, and which adds new meaning to the running (escaping?) figure in the Coghead logo — but other providers have been unveiling automated tools that instantly convert a Coghead application definition file into their own application format. As I noted in my previous post about the risks of PaaS lock-out, the Coghead platform stores the metadata that defines each application in an XML file, which users can download from their account. Upload those files to rival PaaS platforms TeamDesk or Wolf Frameworks and they’ll be automatically transformed to work with the new platform, “without any manual intervention & restore all entities, screens, business rules, complete application design & even import data thru’ an automated utility,” as Wolf’s press release puts it.
Of course, Caspio has probably been using similar tools behind the scenes to help its customers get moving quickly (its ‘Coghead transition program‘ includes free support and “expert consultation services” as well as two months’ free usage). As situational apps expert Jonathan Sapir noted in a comment on my earlier posting, “Most of these platforms store the application definition in XML and use a runtime engine to interpret the XML in order to render the application. So theoretically, if there was a way to convert from one vendor’s XML to another you could get to no-lock-in nirvana (or better still, have an open standard for this).”
To see vendors already doing this gives me a useful proofpoint with which to refute Microsoft SaaS architecture expert Eugenio Pace, Read the rest of this entry »
Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
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