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Dave Stephens on technology and business trends

Sass on SaaS – More Questions

with 2 comments

I'd love to hear people's thoughts on these questions:

1) Why is multi-tenancy a good thing for customers?

Consider this excerpt of a salesforce.com email alert after multiple severe outages of their massive single instance:

"As part of our efforts to optimize the salesforce.com service architecture by separating our NA1 service instance into four new instances, NA1, NA2, NA3, and NA4, we are now preparing to migrate your Salesforce.com organization (EAI, id: XXXXXXXXX) to the new NAX instance."

2) What contractual obligation do vendors offer to furnish your data if you decide you're ready to exit the rental market? Said more simply: what will it cost to leave the party?

3) Will SaaS vendors offer a written SLA with financial penalties if service is interrupted?

(In fairness, this was a huge issue with Oracle customers & in my time at Oracle we never offered it. And for good reason.)

4) How many SaaS vendors are too many SaaS vendors for an enterprise?

Because for most companies there is still integration work, no matter whose computer is running the application. So is SaaS just for spots where companies want to ride the "bleeding edge" of functionality in niche areas & then eventually consolidate them back?

5) Where are the value-added services?

Surely there has to be more than "templates" out their for captive tenants. (Ariba may be the most progressive here.)

6) Is there any non-vendor-sponsored data comparing TCO of on-premise vs. on-demand?

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Written by Dave Stephens

05/30/06 9:15 PM at 9:15 pm

Posted in Opinion

2 Responses

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  1. 1) Agreed. All records in one huge database wasn’t gonna’ last long.

    But one code base and database schema that’s automatically updated still has huge advantages (IMO).

    2) sForce API appears to be extremely transparent. Lots of vendors on AppExchange with ETL tools to get everything out at any time.

    3) Wouldn’t hold my breath waiting for SLAs, unless some major 24 hr+ outage hits. Justifies market for ETL / replication tools in above question.

    4) Good question. One management philosophy says anything outside your core competency should be outsourced. AP Clerks are just expected to manage multiple suppliers. So should IT Managers in SaaS consuming businesses.

    5) Not sure…

    6) To truly be a service means it will become a utility, like electricity. What is the ROI of using electricity? It’s just a cost of doing business now, but a lot of generators still get sold for “off the grid” and redundant applications.

    Both models will surely co-exist in the end.

    Mike

    06/1/06 7:15 PM at 7:15 pm

  2. Although you might be focusing on Salesforce, and Saleforce PR may claim that they are the only true multi-tenant product around, there have been a number of other vendors/products that have been offering multi-tenancy and SaaS for the past 6+ years. Multi-tenancy is critical not only for a SaaS vendor to be able to leverage costs efficiently across customers with various levels of configurability/customizability, but also for a large Fortune-100 enterprise to be able to efficiently manage a “single instance” – which can be otherwise super painful as your experience in Oracle has shown… So, hopefully, Coupa is multi-tenant :-)

    Virtually all sourcing – reverse auctions – vendors offer multi-tenant SaaS as the primary model.

    Commerce One’s apps – including Buysite 6.x (2000+) and SupplyOrder/Marketsite Portal – are a good example of such multitenant apps – and there were a bunch of startups in public sector that were offering eprocurement apps built on C1 or Ariba platforms, with some extensions for multi-tenancy admin, with stringent SLAs… Some of them are still around in various forms… They were a bit ahead of the market, but hopefully you will succeed with Coupa…

    PS: How come you were anti-SaaS and anti-multi-tenancy, but it seems that Coupa will be available as SaaS (so presumably will have multi-tenant architecture as any of new generation enterprise sw should;-)

    SaaS Pro

    06/14/06 1:15 PM at 1:15 pm


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