Well, it wasn’t all for naught!

I’m writing this post to announce a new round of funding with one of the industry’s leading venture capital firms, NEA. For anyone in the space, you may be well aware of NEA’s track record, and particularly its interest in backing infrastructure software plays like SaaSGrid. We’re thrilled to have them on board! In tough economic times, it’s even more exciting to get such a passionate vote of confidence in the team and product.

To date, we’ve been very successful at growing as a company, acquiring customers, and delivering our message but this round of funding adds the right amount of fuel to catapult Apprenda into a new phase of growth and success. Through this round, we will continue to revolutionize SaaS technology, work with new markets, and solve more problems than we ever have.

I want to thank all SaaSBlogs readers to date; my conversations on SaaSBlogs (and outside) play to my passion of SaaS, added motivation to our success so far, and will continue to be instrumental in the evolution of SaaSGrid and our market story.

For those of you that couldn’t make it, Abe recently wrote a great article for Datamation that included much of what was presented.  You can check it out here.

Alternatively, if you’re already pretty competent in failing as a SaaS company, we have just what you need to become a bonafide SaaS superstar. :-)

- Jesse

Everyone wants users to tell them how great their product is and what could improve. But what if rather than just going to market with a slightly better product, you could also go to market with a keen awareness of how your target market will be evaluating your offering? This isn’t the easiest thing to do, and in order to do it, your private beta needs to be structured with this objective in mind. It can’t just be “use it and tell us what you think”. You should have a set timeline for the private beta, with well defined milestones and feedback loops, just like any other project.

Here are 3 major things to consider that should help you on your way:

1) You want to understand what the private beta users expectations are going in, before you provide them with access. You want to understand what they hope your product will do for them, what they think it will do for them (based on your website, the information you’ve given them in the past, etc), and why they are interested.

2) Next, you want to understand their immediate first impression. When they initially are provided access, what did they think? What questions did they have immediately? What impressed them right away.

3) Further on, you want to understand the reasons that these users find value in the offering.

Capture this information, document it, analyze it…etc.

Ultimately, you want to understand what you can do to keep your future customers engaged and extremely successful at every point of their relationship with you. When they initially contact you, when they are evaluating your solution, when they sign on and begin using your product, AND hopefully when they are evangelizing your product to others.

BONUS: Here’s an example of a first step and email to kick things off:

Send a precursor email or call (depending on your participant numbers) that tells them that you are preparing to open up access to them in the coming week, but that first you would like them to tell you why they are interested and what they hope your product will do for them. Ask them to simply respond, so that you have some real data about their personal expectations and hopes for your product.

EXAMPLE EMAIL TO SEND FIRST:

Hello _______, Thank you again for your interest in <INSERT YOUR PRODUCT NAME HERE>. We are excited to inform you that next week we will be providing you access to <INSERT YOUR PRODUCT NAME HERE> in response to your interest in our Private Beta. Before that time we would like you to simply respond to this email and tell us why you are interested in particpating, and what you hope <INSERT YOUR PRODUCT NAME HERE> will do for you. We are collecting this data now, before you see <INSERT YOUR PRODUCT NAME HERE>, so that we have an understanding of what your personal expectations and hopes for our product are. Our goal is to make our customers/users wildly successful. Understanding your expectations prior to your initial impressions will help us to better hone our messaging, so that we can communicate the value of our offering most effectively. We greatly appreciate you taking the time to respond with this information and we look forward to working with you.

Going From SaaS Product Idea to Paying Customers in Under 6 Months (WEBINAR)
When: September 25th, 2009 at 1:00PM EDT
Where: Register Here!

This will be a great event.  You’ll have an opportunity to hear from Nate Rowe, CEO of Appoint IT, who recently launched their product offering, and was able to go from a product idea to paying SaaS customers in under 6 months by leveraging the SaaSGrid SaaS Application Server.

You’ll also get a chance to hear from Luis Aburto, CEO of Scio Consulting, and myself.  It will be a great discussion, and you’ll see why SaaSGrid is quickly becoming the solution of choice for ISVs large and small as they make the move to SaaS.

You can find out more details about the event, and register here.

“How to Fail Miserably as a Cloud Software Provider” (NETWORKING EVENT)
When: September 22th, 2009 at 6:00PM EDT
Where: Public House, New York City

This will also be a great event, and an opportunity to network with some movers and shakers in the SaaS and Cloud Computing space here in New York.  You’ll also have an opportunity to hear from Apprenda CEO Sinclair Schuller, and he’ll be delivering a presentation entitled: How to Fail Miserably as a Cloud Software Provider”.  If you’re in the area or can be, you won’t want to miss it!

You can find out more and let us know you’re coming here. We hope many of you can join us!

- Jesse

First, let’s look at multi-tenancy at it’s core. What we’re really saying is that we want each customer to feel as if they have their own application instance regardless of what instance orientation is being used (single instance, multi-instance, etc.) Let’s look at the holy grail of single instance, multi-tenant. What we’re really saying is that generally (this doesn’t fit all applications, but most):

1. Customers needs to login to some *shared* frontend.
2. Customers execute business logic on *shared* compute resources
3. Customers store/get data from a *shared* data stores
4. Customers use auxilliary systems to manage their presence with the service

Is multi-tenancy just a database issue? I hope at this point some level of obviousness has become part of the equation. Multi-tenancy means that you architect your front-end to fit the instance flavor you’ve chosen (in our case, single instance) so that UIs can segregate provisioning and UI rendering. Second, services layers need to execute against data for the correct customer in a safe fashion (so one customer doesn’t clobber another customer), which means we need execution isolation from a tenancy perspective. Next, data needs to be stored and retrieved correctly per tenant. Last, everything from authentication systems to upgrade engines need to understand tenancy and distinguish tenants from one another.

The footprint of multi-tenancy, when done correctly, is huge on an architecture (which also means you’re not using SaaSGrid;-)) One shouldn’t trivialize it as “just an extra column on some tables” because it’s far from that, so make sure you really understand multi-tenancy before tackling it, as it’s one huge iceberg!

First I need to get something off my chest that has been boiling inside of me since my first few conversations with some of the attendees and VARs at the conference: Hosted Exchange or managed IIS servers is NOT SaaS, call it Managed Services, or whatever you want to call it but it certainly is NOT SaaS and certainly not PaaS for that matter.

Now with that out of the way ;) it doesn’t mean that VARs don’t have a role in SaaS and frankly the reason why most VARs use the term SaaS interchangeably with Managed Services is because they really can’t be bothered with the details that actually define SaaS; they simply care that you use it as you go and it lives outside of your premises. SaaS just happens to be today’s cool buzzword, so why not ride the wave, right?

Anyways, back to the point I wanted to talk about; VARs and Channel players are normally considered the Trusted Expert for their customers and as such they can still provide expertise on SaaS applications and arguably much easier than traditional on premises applications.

There are many ways that VARs can make money in SaaS and a lot of them, the same ways they make money today; here are just a few:

Commissions: Many SaaS vendors have referral programs were you can make a decent commission by a simple referral. Even if some of the vendors don’t have an official referral program, I’m sure that most would be happy to talk to you about making something like that work for you if you are bringing them real business that wasn’t already part of their pipeline.

Training & Support: Become real experts of the solutions that you are proposing and go to the extent to offer training & support. Even if the SaaS vendors offer support and training on their own, you have the upper hand of up-selling your existing customers who already trust you as their loyal advisor plus it will make you that much better selling the solution since you know it so well.

Integrations: Native SaaS applications are inherently built to scale (the ones that are properly architected at least and if yours isn’t, check out SaaSGrid for some help!), this requires the applications to be built as service oriented applications so by default most properly written SaaS applications will automatically expose APIs for extensibility and integrations via web services. If you are a technical enough shop, you can actually provide value added services by extending the SaaS application or bridging two solutions much easier than you would normally be able to do in an on premises application.

Consolidation: If you are offering your customers multiple services, you can actually consolidate the services for them and give them additional benefits like central billing and alike.

Clearly these are only a few ways that VARs can play a role in the space and some changes to your core business model might need to be made but what I’m interested to know is really what you think? Are you a VAR making money with SaaS? If so, what are you doing and how is it different than your other traditional on premises offerings; also, how is it affecting your bottom line? If not, why not?

Join us and share your thoughts through the comments. Also If you’d like to mingle with others in the SaaS space, the SaaSBlogs group on LinkedIn now has 2400+ members and is growing every day; make sure you’ re not missing out and join today!

Earlier today, Google announced its acquisition of On2 Technologies, a video technology company and maker of video compression technologies for the web and mobile networks. On2 Technologies is located in Clifton Park, New York - Apprenda’s hometown.  Speculations abound about Google’s plans for On2’s technology, here are a couple takes on the acquisition:

1. ZDNet
2. Business Journal

So, congratulations to Apprenda’s neighbor On2 Technologies!

The topic of the panel was about the effects of running Cloud Computing on commodity hardware, but somewhere along the conversation, somebody asked a question that prompted a bit more explanation  of the general effects of cloud computing.

See, most people are confused about the true benefits of cloud computing; often citing the cost of running a server from a cloud provider as being less than a traditional dedicated server from a traditional hosting company like Server Beach or alike. The fact of the matter is that running a server image from a cloud provider like EC2 is almost twice as expensive as it would be if you had a comparable dedicated server from a traditional hosting vendor.  The reason is because the true value of Cloud Computing, is not in the cost of running a particular server in comparison to its traditional counterpart, but in the flexibility and elasticity that one gets to instantly scale up or down an application at times of high or low demands.  For these capabilities, we gladly pay a premium.

The problem is that 95% of web applications (my personal estimate) are not designed to be able to take advantage of these properties and for a good reason. IT IS NOT TRIVIAL.  Having the power to instantly scale up or down an application to only consume and pay for the resources that are required at that point in time is an amazing capability and if done correctly it WILL be less expensive than running on regular hardware from a traditional hosting vendor since you don’t have to run at over capacity all the time only of those peak times, but taking advantage of that power is harder than most people think.

Careful design and planning is required when building the application to facilitate this elastic scaling, but that is why companies like my own exist. In my opinion (and thankfully I’m not alone on this one), the future of software is on the web, but this new breed of web applications or SaaS Applications have many particular requirements that are key for their success that truly complicate the requirements to building the applications. Things like a true multi-tenant application, customer provisioning, application metering and billing only to mention a few are a must in order to succeed and are not trivial to design.

Cloud Computing is extremely powerful on its own because when done right, it can provide great financial rewards as well as operational rewards but understand that the hardware layer alone is merely a tiny piece of the puzzle.  The true value of Cloud Computing will be much more appreciated when it is coupled with a platform layer like SaaSGrid that abstracts away the hardware layer and provides a unified foundation to enable the elastic properties at the application layer without the explicit interaction of the application developer.

What are your thoughts? Are you using Cloud Computing strictly for hosting or are you taking advantage of its elastic properties?  What do you think about SaaS Application Servers like SaaSGrid?

If you’d like to mingle with others in the SaaS space, the SaaSBlogs group on LinkedIn now has 2280+ members and is growing every day; make sure you’ re not missing out and join today!

First, let’s chat about commodity hardware in general. First, commodity hardware enables commodity computing. The basic idea is that we’ve moved away from supercomputers, or “scale-up” systems (i.e. throw more memory, CPU, and disk at a single physical box to make it better) and to a scenario where we can “scale-out” by adding more inexpensive physical units as a solution to scale problems. Normally, this is done as a reactive measure to a mounting scale problem. We see this in everything from plain old websites to SaaS architectures. As inbound load increases, we add hardware to resource pools thereby increasing capacity, we then load balance, and voila, all better! Interestingly, infrastructure as a service (dialing up raw resources like servers on EC2) makes this even more practical as a solution. It used to be that “commodity hardware” meant real iron, but now we can deal with this virtually and in an “elastic” fashion (the ‘E’ in ‘EC2′) We’ll categorize this reactive commodity-based measure as naïve scale-out. I don’t mean this in the pejorative, but rather in the formal sense; systematic scale-out of this type exploits coarse grained application level allocation and “bolts on” new capacity with the notion that any new capacity be only minimally aware (if at all) of the “old capacity” and the scale problem it is actually solving, hence the word naïve. Assuming that dynamic scale out needs are real enough to justify using cloud hardware (e.g. EC2, GoGrid), then we have an amazing tool to solve our problems.

Naïve commodity scale-out is amazingly powerful and has catalyzed web-scale operations, but is it the “end all” solution? Not even close. Commodity hardware, at least for most of computing, has allowed us to “back into” older software like RDBMS, traditional application servers (e.g. IIS, JBoss) and build certain types of software architectures in response to scale-problems. Realistically, however, it’s not terribly innovative on its own. What I find most intriguing is the “what’s next” discussion. If we look at the past few years, we should have good indication of what commodity hardware, and more specifically, commodity hardware in the cloud, is allowing us to do.

Let’s use Amazon as a focal point (for no particular reason other than they exemplify where some of the change is headed) When we first think of Amazon, we think of infrastructure as a service: raw servers via, EC2 and web scale storage via S3. But now, Amazon is starting to evolve. Recently, they announced Elastic Map Reduce, which is essentially a step up the stack to the algorithm layer made possible by the mass parallelization offered by commodity cloud hardware. In my opinion, we’re going to see a revolution where “the cloud” will no longer mean boring servers that can be “fired up” on command, but rather a whole array of tools like Elastic Map Reduce that are the software layers that expose commodity hardware’s real value. We even see this with our beloved SaaSGrid - rather than being a traditional “single server” or “single cluster” application server, SaaSGrid establishes a “fabric” across arrays of servers (commodity) and creates a unified hosting layer, allowing the applications it hosts to trivially leverage an expanse of servers. This is a great thing to see, given that the complexity of engineering software to actually leverage commodity hardware layers is a difficult thing to do correctly, and will open the door to a host of SaaS applications that weren’t physically or economically possible before.

Just a quick note to all readers, I’m going to be at the Structure 09 conference next week in San Francisco participating in a panel discussion titled “Hosting Cloud On Commodity Hardware“. If you are in the Bay area and are planning to be at the conference, make sure to pin me down to talk some Cloud!

Structure 09 is presented by Om Malik and The GigaOM Network team and it brings together customers, entrepreneurs and early influencers that drive the tech industry.

The Key Note speakers for this year’s conference will be Mark Benioff CEO of Salesforce.com and Paul Sagan CEO of Akamai and the speaker lineup is just as impressive so make sure not to miss out on it.

Looking forward to seeing you all there.

If you’d like to mingle with others in the SaaS space, the SaaSBlogs group on LinkedIn now has 2160+ members and is growing every day; make sure you’ re not missing out and join today!