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Game changer

MM: SaaS represents another development—almost a second or third wave development of the Web. The idea then is that you don’t have to install software or train a whole IT service management staff for managing and provisioning a service. But you can simply go to a provider such as Oco to get a capability that might’ve cost 5 or 10 million dollars for a hundredth or thousandth of that.

MB: Yes. It really changes the game tremendously. There’s been a lot of argument over, “What really is SaaS?” People have various definitions of it—some broader and some narrower. My definition of it is pretty simple.

SaaS is a service you utilize instead of buying software. It’s defined by what you don’t have to do. You don’t have to buy, learn, modify, install, and maintain software.

MM: I think that the analysts have all kind of gotten together and shared some basic definitions of SaaS V1 or 1.0—which was a point solution that wasn’t really set up to interoperate. It might pass data, but it wasn’t really set up to interoperate with other SaaS applications or installed on-premise applications.

MB: I think people talk about the SaaS 1.0 versus the future of SaaS. It’s true that the first wave of SaaS introduced applications like Salesforce.com. Some people would even put applications like Webex into that category. I don’t. The alternative to using Webex is not buying a software package. The alternative to using Webex is getting on an airplane to go give a customer presentation.

MM: I think the Go To Meeting Citrix people would probably argue with that, but that’s okay.

MB: I mean the alternative to these online demo and meeting systems — Webex or the other services like it—is if you don’t want to use one of those, you can’t buy a package that solves the bridging problem between you and whomever you need to give a demo to. I suppose you could host such a thing on your own corporate website, but I don’t recall many people doing that in the days before Webex.

In any case, the point is that these applications didn’t involve integration. We have moved into an era you can call SaaS 2.0, if you want, where the applications are starting to involve the core activities or functions that businesses do, such as business intelligence or ERP and so forth.

So yes, there certainly is a qualitative shift, there. But some of the industry people who I have some disagreement with would say, “It’s not SaaS if you can’t download it yourself,” or, “It’s not SaaS if it doesn’t have self-installation and free trial.”

They basically are narrowing the definition in ways that I don’t believe are required. As far as I’m concerned, if an alternative to a solution requires that you have to buy software and install and maintain it, then it fits the category of SaaS.

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