What Do You Care What Other People Think?

Open vs. Free in Cloud APIs

Sam Ramji — Wed, 14 Oct 2009 10:39:25 -0700

Open and free are orthogonal in cloud computing APIs, but in this world the free aspect isn't typically interpreted as freedom, but price. Freedom in the cloud is more typically associated with data and your rights to move it from one service to another and this is a very important attribute. Application portability has also been raised as an important attribute but currently the application models are early in their maturity curve and vary from straight web programming with a REST or SOAP front end to prepackaged virtual machines to application frameworks like Microsoft's Azure and Google's AppEngine.

Open and free are both crucial attributes in order for a market economy to grow. There are many aspects of cloud computing but for the developers and users of cloud services, the atomic unit of the cloud is the API. Openness and economic growth is a deep subject that may provide clues for how to build a better cloud – in reading the linked paper, consider that a company's APIs represent the "export goods in which it has a comparative advantage". In the software industry open platforms have typically outperformed closed platforms in the long run due to the economies that develop on top of them, cementing those platforms' place in a range of markets.

Open APIs…

Open APIs in the cloud are:

Openly documented
Available via self-service (i.e. developers can sign up on a website, get an API key, with no hassle)
Using open technologies (SOAP, REST, RSS)

An easily accessible example of this is http://bit.ly. There are enterprise services that meet these criteria as well, but bit.ly is clear and can be used to understand the broader applications of APIs. Bit.ly is a simple URL shortening service that also lets you see how many people have clicked on your shortened version of that URL. It's really useful if you want to both project important articles on the web and understand the reach of your projection.

Test 1: Openly documented

APIs are documented here: http://code.google.com/p/bitly-api/wiki/ApiDocumentation)

Test 2: Available via self-service

Go to bit.ly and you'll be able to sign up for an account right away for their direct website
Click the "account" button at the top right and look at the second section, "API Key"
You can now access their APIs programmatically by using this key

Test 3: Using open technologies

You can see this is a REST API from reading the API documentation (granted, it is a mix of verbs and nouns)

… lead to 3^rd party innovation

Tweetdeck has already used this to integrate with them, so Tweetdeck users put their bit.ly API key into Tweetdeck, which then uses the Twitter API to talk with Twitter, and automatically uses their bit.ly account (indicated by the API key) to shorten URLs that are typed into tweets. It made Tweetdeck better and probably increases the traffic to bit.ly.

This could also work on the iPhone application of Tweetdeck but it's not yet implemented in the version I have. Many iPhone applications work by combining the native client capabilities of the iPhone with one or more cloud APIs that provide access to services in a clean, machine-friendly way.

From the efficiency of innovation perspective, keep in mind that Twitter never contacted Tweetdeck to use their API, nor did bit.ly (as far as I know). The Tweetdeck guys simply built a killer application that uses those services via APIs rather than scraping their web sites (a brittle and slow approach). In the last month, Tweetdeck also added Facebook and MySpace support via their APIs. Again, efficiency and reach through designing your core business service to be "remixed" is found through APIs – Tweetdeck users got new value through the app they like and Facebook and MySpace got a new stream of user-driven content, all without sales or business development teams engaging at the outset.

If we take that example and scale that across different services offered by different businesses in different industries - media, financial services, marketing, e-commerce – we see that open APIs against these services are leading to increase usage and revenue due to new innovation by their partners and customers. The classic example of this is eBay's statement back in 2008 that 60% of their traffic was coming through APIs rather than their website – 6 billion API calls per month. That API has been available since 2001, and what we're seeing in 2009 is an API tipping point as Dion Hinchcliffe articulated last November.

Coming next: Free vs. Paid APIs.

Free Is Not The Opposite Of Commercial

Sam Ramji — Tue, 06 Oct 2009 22:45:40 -0700

Free software is not the opposite of commercial software. It is not an attack on commercial software; it can be a way of getting work done that enables software companies to collaborate with community projects for the betterment of both. Users can benefit, because they have access to software that is the product of the efforts of vibrant, diverse communities, dedicated to creating great software, efficiently and cost-effectively.

For those who have followed these topics for some time, this is not new information, but I wanted to take the opportunity to clearly establish the CodePlex Foundation's perspective on these issues.

There are successful software companies whose businesses are based on free software.

The CodePlex Foundation’s Board of Directors and Board of Advisors prove the point. The individuals who are contributing their time and effort to our success have decades of industry experience leading companies that have successfully built revenue and profit solely from free software. Ximian, VA Linux, MySQL, SugarCRM, and DotNetNuke are examples of how to run profitable software companies, built on a free software license base. Ximian (Miguel de Icaza) and VA Linux (Larry Augustin, Mark Stone) were built on GPLv2-licensed software technologies; MySQL (Monty Widenius) is licensed under GPLv2, SugarCRM (Larry Augustin) is based on GPLv3, and DotNetNuke (Shaun Walker) is based on BSD.

Ximian provided Linux-based applications for email (Evolution), messaging (Gaim), and productivity (OpenOffice.org) which were packaged into the Ximian Desktop and were all free software. The company was acquired in 2003 by Novell.

VA Linux, which began life as one of first commercial businesses focused on distributing and managing Linux-based IT systems, provided companies with an alternative to more expensive UNIX-based workstations; the company has since changed its business model to become a publisher and provider of software development support. Now known as SourceForge, the company operates SourceForge.net, Slashdot, IT Manager's Journal and Freshmeat as well as Ohloh.

MySQL used GPLv2 to establish one of the early dual licensing businesses, offering a free community version under GPLv2. For companies that wanted to embed the database into proprietary products, MySQL was offered under a royalty-based non-GPL license.

SugarCRM in 2007 was re-licensed under GPLv3. It had previously offered its software under a custom license. Like MySQL, SugarCRM has a dual-license business model: the Sugar Community Edition is available as free software, and the company also sells annual subscriptions to SaaS versions of Sugar Professional and Sugar Enterprise. This model has built value for SugarCRM, its partners, and also for developers looking for a good CRM system.

Shaun Walker of Dot Net Nuke built a great content management system on a BSD license. Contributors sign a Contributor License Agreement (CLA) that enables the company to defend the project in the event of a legal dispute regarding intellectual property claims.

There are also business models beyond software companies that can build profitable enterprises based on free software - including development services, hosting, and deployment services companies - which are beyond the scope of this discussion.

So from my perspective and that of the CodePlex Foundation, free software is not the opposite of commercial software. The two terms are orthogonal and can either apply or not apply to any given piece of code. We also acknowledge the distinctions present in the community between “free software” and “open source software”. We will tend to use the latter to describe the broad range of software projects that we want to support. We believe in making it easier to get things done, with the best tool for the job, with the best license for the tool; and we believe that by enabling more software companies to contribute to community projects, we can help advance the state of software.

Why It's Called the CodePlex Foundation

Sam Ramji — Tue, 22 Sep 2009 13:59:05 -0700

It's taken from www.codeplex.com, an open source project repository built by Microsoft a few years ago that has now expanded to host over 10,000 open source projects built by individual developers as well as roughly 500 by Microsoft employees. The "code" part of the name refers to the source code which is the substance of an open source project. The idea behind "plex", like metroplex or building complex is that it's a commons which serves a wide range of individuals.

The CodePlex Foundation (www.codeplex.org) is intended to serve a wide range of projects, regardless of platform or technology base, to enable the exchange of code and understanding among software companies and open source communities. Many people benefit from open source software, but a small number of people contribute back. It seems to us that software companies should be in a very good position to contribute back based on employee skills and the benefit that these companies derive from specific open source projects, but in our experience there are a variety of obstacles that prevent or reduce contribution. These range from development culture to copyright and patent licensing practices.

We are working with the leaders of other foundations, including the Apache Software Foundation and the Eclipse Foundation, to ensure that the CodePlex Foundation is a useful complement and enables community-based open source projects to expand their reach through increased contributions from software companies. We are also receiving a great deal of thoughtful input (including Andy Updegrove's article and the community input on our Google Group). There's a long way to go - this really is a brand-new startup and we are clearly in the alpha release - but from what I've seen I'm very optimistic that we can provide value to open source community projects.

Moving on and the CodePlex Foundation

Sam Ramji — Fri, 11 Sep 2009 17:10:18 -0700

After 5 great years at Microsoft I am moving on. Yesterday, the creation of the CodePlex Foundation was announced, as well as my departure from Microsoft. I'll be joining a cloud computing startup later this month in Silicon Valley.

It was a hard decision, as the time I've spent at the company has been both challenging and rewarding. I remember a sense of disbelief when I first interviewed for the Open Source Technology Strategy role in December 2005 and Bill Hilf told me that one of the core responsibilities of the job would be a quarterly briefing with Bill Gates and Ray Ozzie on open source technology trends. On the other hand, he said it would involve external public speaking - primarily to fairly polarized audiences. That was a doubly scary proposition as I was not a public speaker and I knew the audiences quite well, since I'd competed with Microsoft for many years in prior companies and used Slashdot as my homepage.

I was certain that open source was an industry wave that Microsoft would not be able to ignore, and that it was getting closer to an inflection point. I had spent over a year at the company in the Silicon Valley-based venture capital team under Dan'l Lewin and Cliff Reeves, and I could see that the company's approach to disruptive market dynamics was starting to change. No matter what happened, I was sure that being at the center of the open source team at Microsoft during the coming years would be fascinating and important.

46 months later, I am amazed at the changes that have occurred for the company, for the team I belonged to, and the sentiments of the industry. There is much work left to be done but the distance we traveled was remarkable. I have a feeling that I'll be reflecting on this period for the next several months, so I won't try to cover it all here. Matt Asay wrote a very generous article with a brief reflection of the changes which is here. I've learned an enormous amount thanks to the intelligent, energetic, and fearless people that worked for me, the bold and honest open source community leaders who engaged with me, and the Microsoft executives who supported me.

I have heard some strange speculation on why I'm leaving and the answer is simple - for personal reasons, my wife and I have decided to move our family back to California. I had many discussions with executives at Microsoft about how to continue my work from here, and received a warm reception along with a range of opportunities. Ultimately I decided that I could not do justice to a corporate/worldwide position from afar, and that I could not bear to live away from my family and commute to Seattle five days a week.

So the change is made, and it has been very challenging. But it's now complete and I am excited to launch the CodePlex Foundation and join my new startup. As a close friend told me this week, "The best is yet to come" and I do believe that. To everyone who has helped bring me this far, I say thank you; I am very grateful.

Architecture Strategies for Catching the Long Tail

Sam Ramji — Mon, 22 May 2006 16:19:59 -0700

Fred Chong has completed his work on the overview of the architectural guidance for building Software-as-a-Service (SaaS) applications on Microsoft infrastructure. If you haven't seen it yet, check it out.

Fred spent several weeks in the field with SaaS providers who have built their applications on Microsoft in order to understand the key issues core principles in building a scalable, multi-tenant on-demand environment. Many of the companies they worked with are startups managed by the Microsoft Emerging Business Team (EBT), and I had the privilege to connect with some of them.

The EBT is actively reaching out to and working with SaaS providers building on the Microsoft platform in order to improve their market exposure and business relationships. If you are interested in connecting with the EBT, check out their SaaS page and drop a line to SaaSMS@microsoft.com

Open Source Strategy at Microsoft

Sam Ramji — Mon, 15 May 2006 17:29:32 -0700

I've been quiet on this blog for the last few months because I've taken on a new role at Microsoft: Open Source Technical Strategy. At this point, some of you are thinking:

a) I'm joking
b) I'm crazy
c) I've joined a dark conspiracy

But in fact the truth is:

d) none of the above

As Director of Platform Technology Strategy (official title), I run the Open Source Software Lab at Microsoft, where we have hundreds of physical and virtual servers running 40+ distributions of Linux, 12+ variant of Unix, and several versions of Windows. The research projects we do run from testing interoperability of network protocols like IPSEC and IPv6 between Linux and and Windows technology, the user experience and technical capabilities of HPC projects like ROCKS and Ganglia, to the broader attributes like size of developer base and changes in the development model for different Open Source projects.

We're also working with JBoss and SugarCRM on optimizing their open source applications for Microsoft infrastructure like Windows Server and SQL Server. This has been fun, rewarding work that has helped to demonstrate the truth of our statements about working with Open Source.

Finally, I'm active in the Microsoft Shared Source Initiative, where I am responsible for Technical Strategy. We are seeing some great work from inside the company - teams from all product groups wanting to contribute to Open Source in some way. This week, Microsoft launched CodePlex in beta. CodePlex is a developer community infrastructure hosted by Microsoft on behalf of Open Source developers - a place for code from both Microsoft product teams and the community to reside and for the developers themselves to collaborate. Currently a dozen projects are there, ranging from IronPython to the Commerce Starter Kit.

I have a new blog at http://port25.technet.com, a site we've built to have a constructive dialog on Open Source, Interoperability, and Microsoft.

Change is coming and I'm thrilled to be a part of it. I'm particularly grateful to people like Andrew Aitken, Mary Coleman, and Matt Asay for what they taught me about Open Source and the Open Source community.

SaaS Architecture Guidance

Sam Ramji — Tue, 28 Feb 2006 19:14:53 -0800

I've had the privilege to work with Fred Chong and Gianpaolo Carraro, a pair of extremely bright guys who work in the Architecture Strategy group. They have a passion for SaaS and are applying themselves energetically to mapping out the space of SaaS application architectures. They realized that there is very little guidance or documentation on best practices for SaaS architectures in the community at large - while there is some shared knowledge and a set of conversations, no hard documentation exists in any comprehensive way.

Fred is now on a mission to build definitive guidance on how to grapple with tough issues like multi-tenancy (including defining what that means), security, customization, metadata, and operations readiness.

Fred has posted the outline of the SaaS architecture guidance book that he is developing on his blog, and I'm pasting some of the chapter outlines here as well. Fred is an expert in Identity Management and Web Services management (he literally wrote the book for WSM at Microsoft), so he knows what he is talking about.

1. Introduction
2. Business Model
3. Application Architecture Overview
4. Scaling 101
5. Data Management
6. Tenant Management
7. Tenant Customization
8. Application and Data Security
9. Programmable Software Services
10. Programmable Software Service Consumption
11. Instrumentation and Monitoring
12. Configuration Management
13. Metering
14. Infrastructure Security
15. Operation Structure

If you're interested in this, drop by Fred's site and take a look - better yet, send him an email and tell him what you think.

Future of Commercial Open Source

Sam Ramji — Fri, 20 Jan 2006 18:10:17 -0800

I got to take part in a workshop in Santa Clara yesterday put on by SDForum - "The Future of Commercial Open Source" - unlike a standard event in the valley, this started with "opening comments" from the panelists and then broke out the 70+ attendees into 6 working groups, each discussing a question about "What will Commercial Open Source be like in 2010?"

Andrew Aitken of The Olliance Group was the instigator, and brought together a really outstanding set of people - Tim O'Reilly, Rod Smith of IBM, Simon Phipps of Sun were panelists, and the constellation of VCs and open source companies was amazing. As a bonus, Mark Radcliffe of DLA Piper Rudnick summarized the first draft of the GPL 3.0. I've worked with Andrew Aitken in the past for insights into Open Source and given his knowledge and connections, it was no surprise that the event was a success.

It was no surprise that Microsoft was mentioned many times - but the big surprise to me was hearing Tim O'Reilly say, "If you consider companies that contribute to Open Source projects to be Open Source Companies, then you would have to say Microsoft is one, because they contribute a lot of source code." He went on to say that his definition of Open Source companies is companies that use OSS, like Google, SugarCRM, etc.

Tim's insights:

Open Source is about sourcing commodities - we should look at the core this phenomenon as the software supply chain enabled by Sourceforge
Can SourceLabs, SpikeSource, and OpenLogic become part of the Sourceforge ecosystem? This would mean that they are truly integrated into the software supply chain. What about Palamida, Black Duck, and CollabNet?
There is a linkage between OSS and the Long Tail - find niche markets and use OSS to source niche technologies
Ultimately, success for OSS will come from applying the Dell model - instrument the front end and back end of your business and find the inefficiencies - this is where the opportunities for OSS ecosystem infrastructure lies
By 2010, the business frontier and the hacker frontier will move. The hotspots will be very different and we should expect to be surprised. OSS will be part of every software business, and every company's strategy - much like the Internet has done.

Simon Phipps (who is the chair of OpenSolaris) commented that "customer progress with open source is much slower than the industry's progress, so we must be careful and not rush in where customers fear to tread."

We were told not to blog about the content of the roundtable "thinking sessions" themselves, and I won't, but I will say that I had the pleasure of working with some real luminaries in the space - John Roberts (CEO of SugarCRM, the most interesting OSS business model today in my view) and Mary Coleman of Walden International. I learned a lot from the discussion and met some very sharp people. It was very lively given our table consisted of two commercial OSS companies (SugarCRM and Alfresco), two commercial giants (Microsoft and SAP) and four VCs...

Finally Doc Searls had an amusing and insightful summary of the state of OSS and software in general, drawing heavily on the construction industry as a metaphor for the mature state of the software industry.

Where are the OSS/BSS companies for SaaS?

Sam Ramji — Thu, 19 Jan 2006 16:22:54 -0800

Most of the companies I've spoken with have had to build their own OSS/BSS systems to run their Software-as-a-Service operation. Provisioning, metering, and billing are core business functions for service delivery organizations, and while there are custom aspects to them, and hence good reason to build your own, there are probably better reasons to buy them off the shelf… if they were available.

Companies like Portal Software and Convergys have long supplied these systems to the telco industry, yet I've seen no indication that they are moving to engage the SaaS segment; nor have I heard of VC-backed startups targeting this critical infrastructure space.

A related need is that for a robust pricing engine that is capable of handling multiple pricing schemes (i.e. per transaction, per user-month, or per CPU-month). Again, this is a core business function, and as we saw in the great Telco battle between Verizon and AT&T Wireless, the winner is the one that can combine their difference service assets into the widest variety of packages. The story behind this (from my perspective) was partly due to integration (Verizon made the investments required to integrate their dozen-plus backend billing systems) and partly due to pricing & packaging - the ability to target a new demographic or customer segment with a custom package that is more attractive than the competition.

One quote I heard in the last few months - and I apologize, I have forgotten who said it - is that in the end, telco margin per customer is probably the same between "friends and family", "small business", and "enterprise" packages… but the success of the business is in crafting the package that feels right to the target customer and incents them to make the purchase. So Verizon won, because they used their pricing agility to win new customers.

The corollary for SaaS that I'm taking away is that pricing flexibility is going to be key to competitive advantage… which brings me back to "where are the OSS/BSS apps for SaaS?"

Scoble Interview: Enterprise Mash-ups

Sam Ramji — Tue, 22 Nov 2005 15:31:38 -0800

I got the chance to sit down with Robert Scoble for 20 minutes last Friday. The thing that has puzzled me recently is whether mash-ups are for real, or just another Web 2.0 buzzword.

So I asked Robert: "Are mash-ups going to make a real difference outside of the digerati - do you think they'll make it into the enterprise?"

His take was: what's to prevent mash-ups from being the main way that departmental apps are built in most enterprises 3-4 years from now?

We've seen composite applications pitched for years, with some very cool companies like Digital Harbor building development environments for constructing them, but in a way mash-ups are an even simpler way to build a composite application - pull together a set of ICCs (still looking for the definitive term for this, as are others, it seems - see Harry Pierson's discussion).

So what would an enterprise mash-up server look like? How would it have to be packaged in order to be adopted by departmental users? Would it be hosted like the other new technologies that are breaking into departmental use (salesforce.com, MarketTools, ExactTarget, etc.) or would it need to be a local server?

One of the other issues Robert raised was that of attention, and its necessary evolution to make the computing experience more useful. Currently, attention is captured and processed only on the server, which makes for some thorny issues about trust (who am I trusting with my attention data? and why?). To deal with these issues it seems to me that there will need to be a client-side standard for attention, implemented by browsers for inter-ICC communication, as opposed to relying on the server to have good behavior.

Then, in a twist of synchronicity, I got to talk with a very early-stage company building a mash-up server that can run on the client or the server. It's in stealth so I can't disclose much more yet... but I am becoming convinced that this programming model could be just the thing to build SaaS composites on.

[Updated to add reference to Harry Pierson's entry.]

Contrary Evidence at the SLC

Sam Ramji — Wed, 16 Nov 2005 16:58:50 -0800

At last week's IDC Software Leadership Council, opinions on Open Source were not the only surprise. The IT Execs from 4 companies (Manufacturing, Healthcare, Heavy Equipment, and Financial Services) were generally against subscription models for software. As the conversation progressed, two key statements came out:

The CIOs did not want to go with subscriptions because if their business grew beyond expectations, they didn't want to pay the software provider more ("Why should we share the upside"?)
The CIOs did want providers to reduce pricing if their business failed to grow to expectations

I think this was a case of two things - first, the natural expression of greed (wanting vendors to share the downside but not the upside) - but more importantly, a need for the industry to provide clearer guidance on standard pricing models. There was a clear conflation between value-based pricing and usage-based pricing in the mind of the customers. Additionally, they were concerned that in the long run it would be cheaper to go with perpetual licenses and pay maintenance, dealing with amortization internally, rather than pay a subscription cost which would never go down.

So where do we go from here to advance the understanding of the SaaS industry's offer to CIOs of mainstream companies? Are the doubters right, and will SaaS fail to penetrate large enterprises because of these issues?

Disruptive Innovation and Darwin

Sam Ramji — Mon, 14 Nov 2005 22:20:58 -0800

I have great respect for Clayton Christensen, who has done serious work putting real meaning into the term "disruptive innovation". He's quoted in the latest Newsweek article on Skype, saying:

Still, the novel pay schemes "are hugely interesting," says Harvard Business School professor Clayton Christensen, who cites both Kazaa and Skype as great examples of the "disruptive innovations" he studies. "It's almost never the technology itself that paralyzes the incumbent—it's that the incumbent has a system for making money that's irrelevant to the new guys."

The combination of companies growing up after the bubble burst, dealing with recession and market pressure by using free software and then reducing customers' cost to use through "rightsized" pricing (moving amortization costs of hardware and software from the customer to the vendor, and reducing overall management costs through centralization) has produced some very fit organisms - not unlike biological organisms that have deveoped in impoverished environments, they may be tougher than the incumbents of enterprise software.

Axel Shultze of BlueRoads has said that no one originally set out to get to the current state of SaaS - it was a series of changes to fit the customer environment that led the industry here. It will be very interesting to see where the intersection of pay-as-you go and ad-funded software business models leads us next. I think Darwin would be having fun right now watching this industry evolve in real time.

SaaS is the "S" in SPLA

Sam Ramji — Fri, 11 Nov 2005 14:49:20 -0800

I've found that relatively few people know about the Service Provider License Agreement, which was built for hosters and companies which need monthly, usage-based licensing. From the program description:

The Services Provider Licensing Program enables services providers to license Microsoft® products on a monthly basis. The program is designed to emulate how service providers do business - providing services on a monthly fee to their end-customers. A sample list of products available to service providers in this program is provided below.

So it's a pay-per-use model that works in arrears - hosters provide a report of the license units used that month and pay after they're done. SPLA incorporates Software Assurance so there is only one license and one price to pay for usage. There is a version specifically for ISVs which you should look at if you're currently a SaaS ISV using the Microsoft perpetual license model.

Two good examples of why this is useful:

Cashflow management: under the perpetual license you would need to buy the software up front and amortize the cost over a multi-year period. SaaS is a cashflow-focused business model with little room for capital expenditures that need to be rationalized later (as seen by the standard practice of leasing hardware rather than buying)
Seasonal volumes: if usage goes up one month, and down the next, there's no need to buy additional perpetual licenses, guess what the necessary capacity will be, and suffer for guessing too high (if you're in Operations at a SaaS company, you know how challenging this can be - as they say, "it's hard enough to predict the past, let alone the future"). Instead, SPLA users report & pay month to month, so payments go down when usage goes down.

The team that came up with SPLA, led by Pascal Martin, has partnered with Rackspace and other hosters so that SaaS ISVs can transfer their existing operations to an MSP. They are working hard on the next version of the ISV-focused hosting solution - more news on this in the near future.

A Billion Emails via SaaS on .NET

Sam Ramji — Thu, 10 Nov 2005 22:31:48 -0800

I've had the chance to some time with ExactTarget in the last week. They're a SaaS email marketing company based on .NET with a very slick AJAX interface. Since they're an email-centric company, they use Outlook as their design center - task pane selection and folder trees on the left, interaction page on the right, etc. This parallels feedback I've heard from customers about email interfaces in the recent past.

The impressive statistic I got from our conversation was that they will send a BILLION emails this quarter - perhaps it's my ignorance of the email marketing space but I thought that was impressive.

While talking with their CTO and VP of Engineering, I learned a few things.

First, they're doing all of this on end-to-end .NET (Windows Server, SQL Server, etc.) and have achieved massive scale. Second, they're based on AJAX.NET, an elegant Open Source AJAX framework for ASP.NET (for example, to make a method asynchronous on the client, you just add an attribute: [AjaxMethod]). Furthermore, they've hand-built a number of generally useful client-side features using AJAX - a WYSIWYG editor like Writely, and due to their server-side architecture, they've been able to integrate useful data cleansing tools via SOAP interfaces. With the number of comments I get about REST >> SOAP these days, I had to ask about their use of SOAP. They said they got it for free by using ASP.NET (.asmx pages), and that the automatic harnessing of SOAP rather than raw XML was useful.

The new stuff they're coming out with - and which they demoed at Salesforce's conference recently - is significant - partly because of their use of AJAX for some sophisticated drag & drop workflow features, and partly because of the breadth of scope they can handle with their workflow engine. I can't give it all away here, but be sure to check them out when they launch the new stuff in December.

The ExactTarget team was happy overall with our technology, but were not happy with our licensing. Running on Windows and SQL Server perpetual licenses, they are charged in a way that's out of sync with their business, and while standard "failover" servers are not charged for by Microsoft, "unutilized production" servers are. Fortunately, we do have a better offering for them - I believe that the Service Provider License Agreement (SPLA) will be the solution to most of their issues.

If you're a SaaS ISV and you're using Windows, you should almost certainly be using the SPLA instead of perpetual licenses - it's pay-per-use and is a much closer fit to the SaaS operations & cashflow model.

People as a Service?!?

Sam Ramji — Wed, 09 Nov 2005 09:42:41 -0800

If you haven't already heard about Amazon's "Mechanical Turk" you absolutely have to check it out. When I first encountered BPM companies who used "human-in-the-loop" learning I felt cheated. Four years later the idea of using distributed humans to solve problems that machines still can't seems awfully clever.

Open Source as the Big Bad Wolf?

Sam Ramji — Wed, 09 Nov 2005 00:08:34 -0800

Having spent time with inventors, entrepreneurs, and the analysts who love them down here in Silicon Valley, I have come to expect generally positive comments from CIOs about Open Source. Quite surprisingly, at the IDC Software Leadership Council today, the CIOs on the roundtable were consistently "strongly against using Open Source" software in their organization and "realized that they were placing their companies in jeopardy" with their current lack of governance around OSS adoption.

I was fairly shocked - and no, I'm not spreading FUD nor am I against OSS (as Director of Engineering at Ofoto from 2000-2001, I ran a department that used Linux, Apache, Tomcat, and Jakarta for 100% of development; the only software we paid for was Sybase). The key issue they all raised was indemnification against IP and Open Source Licensing violations. Jason Matusow was there and raised the point that the concern is really around commercial vs. non-commercial OSS. Commercial OSS providers take responsibility for understanding the licenses and resulting restrictions embedded in the software they provide, which appears to effectively deal with the core issues the CIOs were raising. Despite making these points, the CIOs were not mollified and continued their conservative stance on the topic.

Bob Zurek of IBM was at the meeting as was David Gee of HP - very interesting group of people with whom to discuss SaaS, Open Source, and industry consolidation. Amy Konary of IDC was insightful as usual on the SaaS topic. Wonder where the conversations will go from here?

Fortunately, I get to sit down with Palamida later this week and am looking forward to learning more about the expanding business implications of using Open Source.

Dave Winer has the Scoop: Ozzie, Gates, and SaaS

Sam Ramji — Tue, 08 Nov 2005 23:49:09 -0800

Robert Scoble has posted links to Dave Winer's site, where the Ray Ozzie memo I mentioned earlier has been posted, in full and complete form, along with Bill Gates' "turn the ship" email. Worth reading.

[Updated: Now I think you can see that this is not just about Web 2.0, it's about Microsoft 4.0 which will be a service-based computing platform for the industry - not just an inward-looking "sell our software differently" approach.]

[Update 2: A well-written article in the WSJ discusses the meaning of all this.]

VCs on SaaS

Sam Ramji — Mon, 07 Nov 2005 17:20:36 -0800

I've been asked several times recently why I'm focusing so heavily on Software as a Service. The answer is very simple: the future of the model is inescapable. I work in the team at Microsoft that is responsible for managing our relationships with Venture Capital firms and helping their startups succeed with us as business partners. In the last 6 months I have heard in person - whether around a table or attending an event - from partners at Accel, Hummer Winblad, NEA, Norwest Ventures, and many others: "We are only considering software deals that include a strong SaaS component."

John Hummer actually said it more directly, at the SDForum event on SaaS back in March 2005: "If you are going to pitch me a software deal, it had better be Software as a Service." Emergence Capital is a $125 million fund established solely to finance SaaS plays. BAVP made their interest clear way back in 2003.

Add to this the fact that many partners I've spoken with have said that the software side of their portfolios currently include between 1/3 and 1/2 SaaS plays, and the reason to focus on this is obvious: the trend is only accelerating. IDC forecasts the delivery segment (not "market") to reach $10.7B by 2009.

It can be argued that this is a new bubble, but unlike Web 2.0 (which sure smells like a bubble right now but perhaps it's an echo boom) it is a software value shift that is fundamental and easy to grasp, whether or not you're a member of the digerati.

Meet up at the VS/SQL/BT Launch?

Sam Ramji — Mon, 07 Nov 2005 08:01:08 -0800

I'm going to be at the VS/SQL/BizTalk launch event in San Francisco today at the Moscone center. If you want to meet up and chat in person about partnering with Microsoft as a startup, getting help with VC, or what we should be doing to enable the SaaS ecosystem, drop me an email.

And thanks to those of you who have shared your ideas on the SaaS Startup Offering via comments and email - I will be replying over the next few days (once the launch event and IDC's Software Leadership Council are over).

Client Software as a Service

Sam Ramji — Fri, 04 Nov 2005 21:03:23 -0800

I spent a couple of hours with Dan Udoutch and Venky Venkataram from AppStream yesterday - smart guys with an awesome product. Dan was at Netscape in the early days and has been all around the Valley since then (including CommerceOne from early on to the famed $350 share price and then Intersperse) and Venky ran engineering at ZoneLabs - enough said.

AppStream has some very cool technology that streams just enough of a Windows or Java application down to the desktop that it can start up and respond to standard user flows - then pulls down more of the application dynamically as the user activates other features in the app. There's no interruption in the user experience, and the app runs locally on the client, with normal permissions, Start Menu entries, all the normal Windows app behavior you'd expect. This is cool technology because the user wouldn't even notice it was there.

They combine this with robust management, provisioning, and metering for applications across large user communities. Since applications are streamed on demand, apps can be versioned automatically across a user base, without any action required from the user.

What this enables is full client-side software as a service - where the definition of SaaS is "freeing the customer from daily operation, maintenance, and upgrades of the application". When I step back from the SaaS phenomenon what I see is a value shift in which customers want their applications to "just work".

There are a number of applications for this - one that springs to mind is security policy management of application versions; NAP and NAC both require a local SHA (System Health Monitor) that reports the versions of current apps on the client back to the Health Server, which then allows access to the network or sends the client a list of remediations required; the client then goes to a remediation server for detailed instructions which typically require patching or upgrading specific applications. AppStream would allow this whole cycle to be bypassed (for managed applications) as the application would automatically stream down the latest version when the user starts it up.

I think this could be transformative as the pendulum of SaaS swings back to blended client & server implementations.