SaaS For IT Management
This blog is all about using Software as a Service (SaaS) for IT Management.
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SaaS, IT Management, and Storage News Roundup
Posted on December 2nd, 2009 2 commentsGoodbye November, hello December.
It’s about time to have a look around the SaaS/IT Management blogosphere to highlight what’s going on.
Shameless Self Promotion
Wasn’t sure whether to do this first or last, but I might as well get it out of the way. Here’s a quick roundup of Aprigo news since the last roundup:
- Seven Tips to Help Manage Data Storage Growth – Computer Technology Review- An article we wrote for the Computer Technology Review
- Do storage managers have a “pack rat” mentality?- A blog post on the Aprigo blog defending storage managers from Symantec’s assertion that they are pack rats
- Aprigo On KillerStartups.com - Aprigo was featured on KillerStartups.com, a site that lets readers vote whether the startup will “be a killer.”
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Aprigo NINJA in PCMag.com’s @Work Blog- Aprigo NINJA was featured in PCMag.com’s @Work blog by Errol Pierre-Louis.
We’ve got more news coming, but I don’t want to bore you with that. Moving right along……
Storage News
- Scott Lowe has resurrected his Storage Short Take series, and it’s well worth the wait. In this, #5 in the series, Scott gives the Reader’s Digest version of what’s going on in the storage world.
- On the StorageBod blog,
- W. Curtis Preston has a wrapup of data protection and data backup trends in 2009
IT Management News
- Chris Evans at GestaltIT gives a wrapup of the first annual GestaltIT Tech Field Day, where both vendors and journalists converged for discussions and evaluations of the hottest tech products. Judging from the coverage, it was an excellent event, and they’re already planning the second annual event.
- Looks like IT spending is up according to Bob Evans, as he reports “Accenture Stock Target Soars As CEO Sees IT Recovery“. From the post: “A Credit Suisse analyst has boosted his target price for Accenture shares from $42 to $55 on the expectation that enterprise IT spending is beginning to loosen up and that Accenture will be a prime beneficiary of CIOs’ more-expansive spending habits and their increasing acceptance of outsourcing.”
- Mozy has a great video highlighting the importance of data backup by asking people on the street how much they’d sell their laptop for right this minute.
SaaS News
- The Security Risks with Sharing Documents and How to Prevent Them- Adi Ruppin has an article in IT Business Edge talking about the new access control opportunities and threats brought about by introducing SaaS in IT Management.
- Enterprise SaaS Working Group: Identity Management in the Cloud- Ryan Nichols has a post summarizing the Enterprise SaaS Working Groups activity around identity management in the cloud.
All right, that’s it for now. I’ll keep trying to do this weekly.
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Is SaaS “Greener” Than On-Premise Software?
Posted on September 22nd, 2009 No commentsOver on the SoftwareAdvice blog, Chris Thorman has an article entitled “SaaS v. On-premises Software: Which One is More Green?” Rather than simply speaking in generalities, Chris actually crunches the numbers and gives examples:
On-Premise Energy Consumption:
We’ll use the example of a typical physician practice, since electronic medical records (EMR) software is a market we know well. The “On Premises” side of the graphic below illustrates a four-physician medical practice, running EMR software on their own in-house server.
The HP ProLiant DL server, one of the most commercially popular servers on the market today, will consume 7,008 KW of server energy per year. That’s running 24 hours a day, 365 days a year.
In addition, each user is using a Dell desktop 546, Dell’s most popular starter desktop. A single 546 Dell desktop will consume 600 KW of energy a year, running 8 hours a day for 250 days a year (an average work year).
A four-physician practice will consume 9,408 KW of power each year just to run EMR software on-premise. Each user will personally consume 2,352 KW of power each year.
Now, the SaaS model:
Now let’s see how the energy consumption of SaaS software stacks up. Rackspace, one of the largest providers of cloud computing hosting services, lists the Dell PowerEdge 2950 III as one of it’s most popular server choices. And since a data center would have a redundant server in addition to the PowerEdge, our SaaS applications are powered by two of these servers.
Running 24 hours a day for 365 days a year, the total energy consumption for these two Dell servers running SaaS applications would be approximately 6,570 KW/yr each, or 13,140 KW/yr total.
Running this server in a SaaS data center allows the SaaS EMR vendor to tens or hundreds of customers on one server. When a new customer goes line with the application, the incremental computing requires – an power consumption – increase only marginally.
How does this affect energy consumption by our physicians?
Now our physicians are only using 131.4 KW (1/100th) of the Dell PowerEdge server energy each year because of the multi-tenant architecture. Also, because SaaS applications require less computing power on the client, the physicians are able to switch to more efficient Dell netbooks, which only consume 120 KW of power each per year.
Using SaaS, our four physician practice now only consumes 1091.4 KW per year running their EMR software. That’s 272.85 KW per year, per physician.
That’s a 88% reduction in overall energy consumption for a four physician practice using SaaS EMR software over on-premise software!
So the lesson here is that even in a small, four physician practice, switching to a SaaS infrastructure can reduce energy consumption dramatically. And when you scale up the numbers, the incremental computing resources and power consumption only increase marginally.
Chris also points out that there are other “green” benefits to SaaS, inlcuding:
- Remote IT support. Whether or not your IT support is in-house, they’re going to consume energy traveling to and from an office to perform maintenance and fix problems. Since there really isn’t much of anything to maintain at the office, SaaS vendors are able to provide remote IT support, reducing travel and CO2 emissions.
- Less frequent replacement of PCs. Given that SaaS applications just require a web browser on the client machine, you really don’t need a very powerful PC. SaaS customers can keep their old machines in place or get a longer life from any new machines they buy. This compares to on-premises software, where customer will often upgrade hardware to support the computing resource requirements of new client software.
- Telecommuting. Accessing on-premise software remotely is typically slower and more technologically complex than a SaaS application. With SaaS applications accessible from any computer with an Internet connection, employees can work remotely, saving fuel and energy costs in the process.
I really enjoyed the post by Chris, and love the fact that he used actual data to make his points. And like every good post, it brings up some questions:
- At what point do the cost savings on power consumption alone make moving to a SaaS model the smart option?
- How do these numbers compare in an enterprise infrastructure with thousands of end-users and multiple apps?
- Is there a good way to associate cost with reduction of power, reduced travel and the cost of upgrading hardware and replacing end-user machines? It seems like the SaaS model has multiple environmental benefits (which are excellent), but showing cost savings are critical in getting business stakeholders to make the jump to SaaS. Are there standard metrics out there to help show the cost savings?
Again, excellent article from Chris. Can’t wait to hear what you think.
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Another SaaS IT Benefit: Automatic Updates
Posted on September 1st, 2009 No commentsThe following post is cross-posted from the Aprigo Blog:
Last Thursday we announced the release of Aprigo NINJA . One of the cool built-in features is automatic updates.
When we thought about rolling out automatic updates, our motivation was streamlining user experience: We’re delivering a SaaS IT management product which needs to have a small presence in the customer’s environment. Now, when you develop a pure SaaS offering, with zero on-premise presence, all you have to do is update the back-end and the customer immediately enjoys the benefits of the new version (at least, the next time they log-in).
When developing a SaaS IT Management solution, we wanted to provide a similar experience even though our customers have a small (SaaS) client on-site (needed because after all you want to manage YOUR environment).
It’s a dilemma, but we’ve figured out a solution. So here’s what we’ve done:
- Back-end updates are transparent to customers (we’re running on AWS and there’s a lot of stuff that’s happening there: Servers, App servers, DBs, clustering, replication, snapshots etc.) This is one of the benefits of a SaaS IT Management offering - we remove the complexity out of the customer’s environment and updates happen without interference.
- We have an ‘update-aware’ SaaS client - when an update is available, the next time a customer logs-in to our AIR client (why we chose AIR is probably worthwhile a post on its own), they will see a message saying “a new version is available”. They then simply click a button to upgrade and that’s it.
The automatic upgrade.Again, we were thinking about streamlining the customer’s experience, but after reading a post on Everything Sysadmin that talked about automatic updates, I started to understand that automatic updates are also a key security issue (see the following ACM article by the Google Chrome authors on the security issues around automatic updates).
Wow. That struck my curiosity, so I started googling around, and landed on google’s blog post describing their automatic updater with lots of statistics that show the benefits of having an automatic update capability. Some examples:
- Increased security thanks to timely deployment of security vulnerability fixes
- Better software stability thanks to timely bug fixes
- New features that make software more powerful
At the same time, getting all users to work with the latest software release is advantageous for the vendor:
- Happier users due to more stable, more secure applications with additional features
- Less support required: only unfixed bugs in the latest version get reported by users
- Less testing: engineers don’t have to keep testing older versions on newer platforms and with new third party software or drivers
Even though the research is from the perspective of a web browser I feel it’s equally applicable on a wider scale; even when it comes to on-premise components.
So armed with this knowledge of the additional benefits, we’ll continue working on our next release and will work hard on delivering the next wave of SaaS IT Management solutions. In the meantime, if you want to work with us as a design partner, let us know. We’re always looking to work with people that are smarter than us!
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Aprigo NINJA Now Available
Posted on August 31st, 2009 No commentsI can finally say the 5 words I’ve been wanting to say for months now: Aprigo NINJA is now available.
But before I go celebrating and trying to get the world to try it out, I do have to mention one important caveat: this is a private beta. This is most definitely a “soft launch”, as we’re only approving a handful of accounts at a time. We want to make sure that the people using it have the best possible experience, and want to get as much early feedback as possible.
How we’re accepting users:
There’s a registration form on nearly every page at www.aprigo.com, and when a user signs up there, we get notified that they’ve applied for an account. However, after filling out the first form, they’re redirected to a second form, asking them some more questions. The more information they give us, the better the chance we’ll approve them. It’s basically a way to jump to the head of the line.
Why do we want more information on our users? Now that’s a good question, and I promise: there’s nothing insidious about what we’re doing. We mainly want to know how the product will be used, in what kind of environment, etc. We will never share personal information with any outside party.
So, if you want to get in on the private beta for Aprigo NINJA, head on over to this page and sign up.
For a 60-second look at Aprigo NINJA, check out this video:
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Reliability And The Cloud
Posted on July 9th, 2009 No commentsArs Technica, one of the best blogs in tech has an article from Chris Foreman and Jon Stokes today entitled "Cloud computing promise still stormy with reliability issues" citing some recent high-profile outages as reason to question the claims of reliability by those on the side of cloud computing and SaaS:
In the last week alone, there have been several high profile outages at data centers that host sites, such as video site DailyMotion, credit card authorization service Authorize.net, and Microsoft’s Bing Travel. Even the Google App Engine—a platform for third-parties to run their own cloud services—experienced performance issues that resulted in high latency and even data loss.
Rackspace Hosting, which provides servers that run untold numbers of websites, experienced a power outage Tuesday in its Dallas data center for as long as 45 minutes. Once power was restored, though, it took some sites several hours to come back fully. It was the second such power outage for the company’s Dallas data center in just over a week, though it’s not particularly common; as TechCrunch noted, the last time the company had a major outage was in November 2007. However, the recent incidents illustrate the problem—there are still risks associated with using the cloud.
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Many of the IT pros who are evaluating cloud services name reliability as a major concern with cloud services, and have been doing so in the Ars forums and in closed-door sessions for over a year now. Many of these folks are at large companies and are used to having control over and responsibility for all of the servers that the business uses, so the idea of putting parts of their business on rented, "black box"-style cloud services makes them uneasy.
Many of the vendors that we hear from either downplay the reliability concerns or offer some version of "it hurts to be on the cutting edge." And with this last response, they do have a point. Often1, the decision to use cloud services instead of in-house systems is a decision that’s made for reasons of either cost and flexibility (in the case of SaaS) or development speed (in the case of actual cloud infrastructure).
All excellent points, and points that are valid in any instance when a business outsources mission-critical processes to a third-party. When it comes to selecting cloud or SaaS services, IT professionals will, like the article says "have to carefully balance the downtime risks with the cost and agility benefits of using the different tiers of cloud services (IaaS, PaaS, or SaaS).
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The Freemium Model and Software as a Service (SaaS)
Posted on July 6th, 2009 1 commentSince coming to work at Aprigo, I’ve been a subscriber to Phil Wainewright’s Software as Services blog on ZDNet. Today I saw his article entitled "Free is not a business model" and it inspired me to dust off the SaaSForITManagement.com blog to highlight what he had to say.
The article starts by examining what "free" has come to mean online, and Wainewright comes up with two reasons why businesses like the "slap a google ad on it" approach to online revenue generation:
- The idea of charging people money makes them uncomfortable
- They don’t have the vaguest notion of how to incorporate a charging mechanism into their website
This flavor of free just doesn’t cut it anymore. The days of building a large enough userbase and putting off revenue until later….well, those are over. Instead, the freemium model is picking up heat, and Wainewright describes why it makes sense in the SaaS market. Wainewright quotes Chris Anderson:
Freemium is the inversion of the traditional free sample. Rather than giving out few percent of your product away for free as marketing, hoping to sell the rest, you give away most of your product for free as marketing, hoping to sell to a minority. This is only possible in the online realm, where the marginal costs of production and distribution are close enough to zero to ’round down’.
“Freemium is now the main business model of the booming ’software as a service’ industry online, the online games industry and the fast-growing iPhone applications market. I think that creating business models around Freemium — what to charge for and what not to, a question determined as much by psychology as economics — will be the most interesting, and lucrative, efforts of this online era. And the book, both in its chapters and its tactical advice at the back, is intended to help guide that.”
I think Phil and Chris make some great points here when it comes to SaaS and the freemium model. When it comes to SaaS and pricing, there are a few important factors to consider:
- The ability to "try it out". The nature of SaaS is such that prospective customers can try out the real, working product before making a purchase decision. There’s no prolonged sales process that prevents the customer from experiencing what they’ll actually be getting in the premium product.
- Low switching cost. When you make a decision to buy enterprise software, you’re fairly limited in switching options. You’ve made a $250,000 up front investment, so you have to stick to your decision. In the SaaS approach, the cost of switching is nominal. If you find something better, you can cancel your account with one vendor and switch to another immediately.
These two points are really important, as they keep SaaS vendors honest. If the product isn’t good enough to convert users from the free offering to the paid one, they’re in trouble. And if another vendor has something better, without lock-in there’s no reason customers have to stay with a stagnant vendor.
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Software Testing The Next Target For SaaS?
Posted on June 30th, 2009 2 commentsJohn Foley from Information Week has an article today entitled "The Cloud’s Next Big Thing: Software Testing", where he takes a look at IBM and HP, who have joined other companies in software testing in the cloud. From his article:
IBM and Hewlett-Packard have jumped into the market for software testing in the cloud, a space where a handful of startups already offer alternatives to on-premises testing. It’s an area of cloud computing where the barriers to entry are relatively low for developers and IT departments.
IBM estimates that one third to one half of computer hardware in some large companies is used for software development, testing, and staging. That’s a lot of computer processing power and expense devoted to what’s an important but non-business critical requirement. It’s the type of work, given data center economics, that might be better suited to cloud services.
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Cloud computing is well suited for software development and testing for several reasons. The model supports group collaboration; new servers can be launched and decommissioned as needed; software development projects tend to be temporary in nature, with start and end dates; and some of the governance issues don’t apply because sensitive corporate data isn’t involved. Also, cloud testing enables new approaches and capabilities, such as crowd-sourced testing.
It’s an interesting point, and it definitely makes sense, as long as reliability is there.
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Weathering the IT Budget Storm of 2009
Posted on June 1st, 2009 No commentsI believe this may be the understatement of the century, but hey, I’ll go for it anyway: IT Budgets are not increasing this year. Yup, I know. Really stepped out on a limb there and took a chance, now didn’t I? With budgets in nearly every business unit being cut, it is no surprise that companies are trying to cut back on any new spending - even when it comes to mission-critical IT expenditures. And with mid-market IT managers expected to perfiorm miracles daily in order to keep everything running smoothly, how are they expected to maintain the same level of awesomeness with a smaller budget? Well, here are a few ways for IT pros to maximize their current environment.
First, let me take a few steps away from conjecture. Rather than just taking my word for it, let’s look at some real numbers on IT Budgets. Just today, IDC put out a report that IT spending will decline by 1.8% in 2009. That’s the bad news. The good news is that:
Declining information technology (IT) spending by clients will bottom out in 2009 and will experience marginal growth in 2010, market research and advisory firm IDC has said. Global IT spending is expected to grow 2.9% in 2010 before nearly doubling to 5.7% in 2012.
Okay, so if IDC is right, 2009 will be a year of doing the most with what you’ve got, while 2002-2012 should be a lot better froim an IT Budgeting perspective. So what can you do to maximize your current environment? Well, I’m glad I pretended you asked.
1. Save Money On Network Storage- All right, that’s an easy one, right? No? In theory, it should be fairly simple to figure out how to save some valuable dough on network storage. Some ideas:
- Find Old Files- Find out which old files can be archived, moved or deleted and get them off your network
- Find Files That Shouldn’t Be There- You’ve probably got files on your network that shouldn’t be there in the first place. We’re talking about MP3s, Movies, Family Photos and more. Your users shouldn’t be using your expensive network storage as their own personal entertainment center/ photo album.
- Find Out What Users/Groups are taking up the most space- Understanding the owners of data can help you with chargebacks or at least it can help you find the right size for their needs.
2. Find Out What Others Are Doing- How does your IT spending compare with others in your industry? What’s your storage and management cost per GB, and how does it compare with companies of similar size with similar retention and archiving policies?
3. Take a Look At SaaS/Cloud Offerings- Sure, I’m a little bit biased here, but you owe it to yourself to see if there are SaaS-based solutions that can both save you money and alleviate some of the burden of your IT staff.
Well, that’s just a start. I’d love to hear you other suggestions on ways to keep costs low to keep within a declining budget.
Nathan Burke is the marketing manager at Aprigo, a Waltham, MA-based startup developing online data management tools for IT Managers. To learn more about the company, go to the Aprigo site, or to sign up to be notified when Aprigo launches, click here.
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From Daily IT: The Three Waves of SaaS
Posted on May 26th, 2009 No commentsJust caught this one in my RSS reader this morning: Daily IT News has an article this morning on the Three Waves of SaaS. From the article:
As SaaS matures, we’re seeing providers evolve through three "waves".
Wave 1: Replace mature, single tenant software applications – The early players in SaaS got started by finding applications ripe to be delivered as a turn-key business service in a multi-tenant environment. Most early success among SaaS providers was just that: Taking an existing piece of software and finding a better way to deliver it.
Wave 2: Apply SaaS model to solve new problems that were impractical for existing mature single tenant software applications — Once these firms created an initial foothold, many realized that the SaaS model itself had inherent advantages for solving problems that could not be tackled in a traditional software model. They leveraged a common, centrally hosted architecture to get multiple companies working together, often across the globe, to solve a common business process.
Wave 3: Leverage "by-products" of SaaS business to launch new, higher value services — Now SaaS companies are realizing their whole business model actually produces assets that are quite valuable. Providers have a clear picture of how their software is being used. Over time, they can aggregate data collected through these interactions and report back to customers, giving them unprecedented insights into their individual performance as well as industry-wide benchmarks.
I think that Wave 3 is the most important and most interesting, and not many articles about SaaS touch on it. In many cases, the "by-product" is a mass of aggregate community data that can provide an excellent comparison feature and can be sliced by any number of filters.
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Clip: Why Do SaaS Companies Lose Money Hand Over Fist?
Posted on May 19th, 2009 No commentsJust saw this one in my RSS reader: there’s a blog from a stealth-mode SaaS company called Smoothspan, written by Robert W. Warfield that has a post today entitled "Why Do SaaS Companies Lose Money Hand Over Fist?"In the article, Warfield argues that SaaS companies spend far more on sales and marketing than their on-premise counterparts, and compares them in terms of how many sales and marketing cents are required for each company to earn a dollar in revenue. From the post:
Sales and Marketing
Let’s start here, because this is really the crux of the argument. It’s where SaaS companies spend the Lion’s share of their budgets, and where On-prem seemingly doesn’t spend much at all. Here’s what the numbers look like:t’s start here, because this is really the crux of the argument. It’s where SaaS companies spend the Lion’s share of their budgets, and where On-prem seemingly doesn’t spend much at all. Here’s what the numbers look like:
- SuccessFactors spends a ripping 56 cents for each dollar of revenue they bring in. Analysts expect about 85% growth in exchange.
- Salesforce is spending almost as much: 54 cents to bring in a dollar for which the analysts expect 44% growth.
- SAP has a much more frugal 29 cents per dollar brought in, but the analysts only expect them to grow 17.5% next year.
As a function of pure cost, SFDC and SFSF spend 2x what SAP does for an incremental dollar of revenue, which on the face of it looks highly inefficient. But, before we write the SaaS guys off, note that by spending so much, they manage to deliver 2.5X to nearly 5X the growth of SAP. Which one is more efficient? Not hard to make an argument for the SaaS guys when you look at S&M dollars as payment for growth.
He then goes into administrative costs:
General and Administrative
This is a category everyone loves to hate. It’s overhead that delivers no value. Surely the SaaS companies must be wasting a lot of money here? Large organizations benefit from economies of scale on G&A, don’t they?
- SFSF spends 21 cents on this for every $1 of revenue.
- CRM spends 16 cents for every $1.
- SAP spends 17 cents.
And R&D:
Research and Development
- SFSF spends 16%
- CRM spends just 10%
- SAP spends 21%
Finally, he tallies cost of revenue:
This is one of my favorites. Keeping the cost to deliver the service low is essential for SaaS companies. The fact SAP says they lose money on every sale of BBD is a direct reflection on this number. SaaS companies use a variety of technologies like multi-tenancy to keep costs lower, and it seems likely SAP has missed these tricks. We can’t get the numbers for BBD, but we can compare SAP’s cost to deliver software (largely cost to deliver maintenance, which is Tech Support) to the costs of a SaaS company:
- SFSF spends 24% to deliver their service.
- CRM spends just 13%
- SAP spends 22%
His conclusion is that SaaS companies could be just as profitable as SAP if they were to sacrifice growth for profit, but since SaaS as a delivery model is still young, companies are in the "land grab" process. They’re more interested in growth than profit in this stage, so it makes more sense to spend when spending equals growth.
Now, obviously this post is basing its information on SaaS specifically on CRM SaaS products, but I wonder if the same strategy extends to all SaaS players vs. their on-premise counterparts.
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