Saturday, December 9, 2006

OnDemand - SaaS Black Duck Style

I admit it: I'm old school. I used a mainframe in high school and college in the ‘70’s, time-sharing system in my first job and minicomputer that was muxed at multiple locations subsequently in the ‘80’s, involved with the “ASP Revolution” during the Internet-bubble, and now selling an OnDemand service offering at Black Duck. I think that the more things change, the most they remain the same.

Black Duck is unique, btw, because we offer both an on-premises and on-demand or hosted version of our software compliance management solution.

Black Duck’s hosted application was called “protexIP/OnDemand” because we liked IBM’s vision of “OnDemand”. Recently, at an IBM event, a senior IBM person used the term “SaaS” to describe IBM’s offerings more often that the OnDemand term. It appears inevitable that Black Duck will adopt the SaaS terminology as well. I think it’s practical: IBM is spending around $1 billion in this area and it’s bound to find and expand the SaaS enterprise market.

We have found some challenges in the adoption of an Internet-based or hosted service offering among corporations and mid-sized businesses. /OnDemand is growing but smaller segment of overall bookings (our customers have told us that they prefer to install protexIP on-premises because of the added functionality in the enterprise version) but it is a "sexy" part of the business because it’s based on venture-backed M&A activity and rarefied public company M&A transactions. We own a major market share of this segment of the software compliance market. Still, we think that corporations remain hung-up about using services outside their firewall because of security and IP-protection concerns. This is especially true in Asia and South America and to a large extent in Europe.

Black Duck’s offering uses both a browser interface and a rich client. The client enables us to “code print” the company’s source code and transmit, via the browser, through the Internet cloud to our server in the sky. The experience is also better for the user and offers performance because the original source code is kept on the desktop or server and we transmit only the code print. It’s like sending the architectural diagrams rather than shipping the building, in a manner of speaking.

The SaaS world is a little doctrinaire on this subject. Purists require that these applications be Web 2.0 compliant which means that everything happens within a browser. As a consequence, our next release of protexIP/OnDemand will have lots of AJAX as well and further enable to justifiably call is SaaS. (Our latest behind-the-firewall release has rich AJAX interface.)

I’m told that the OnDemand or SaaS market is particularly fickle in emerging markets where there are no rules and no consistency in service offerings. One would think that emerging markets would be the first place where SaaS would gain traction because the benefits are so appealing. This might be an instance of the industry not knowing how to engage with potential customers in the world outside the US and developed countries.

1 comment:

James said...

The OnDemand / SaaS offering is awesome - especially with the Black Duck business. Big business (especially) doesn't want to install a new server for another service... blade or not. Even if it's another SAN-attached blade server with managed tools - the project becomes that more complex when you introduce hardware like that. The OnDemand offering totally makes the business offering that much sweeter. The "hidden costs" of managing the infrastructure is almost gone.

Plus, business still have integration needs - and all the OnDemand offerings that are great have given their clients standards-based programming interfaces to communicate with the server... so you still get cool programming ability but don't have to worry about the low-level needs of the application as much still. (yes, I'm looking forward to the Black Duck SDK)