a good reminder from David Linthicum about hidden Software as a Service (SaaS) costs. Really, training, troubleshooting and outages do increase support charges, but this is not the whole story.
SaaS approach doesn’t completely avoid core expenses like software maintenance. A lot of companies need customizing and adding features which are critical to them. Such application integration may be not a zero cost yet necessary.
And the bandwidth expenses, too. A company may require broader bandwidth to keep up with SaaS technology, which is an issue in areas where telecom costs are high.
So, don’t be naive while choosing SaaS services and keep your eyes on the ball. However, remember another reminder from David, ‘the other values of SaaS make it a compelling proposition’.
Tim O’Reilly free music distribution and free book publishing with open source software, again. The most interesting part is his quote about awareness:
“A lot has to do with the ratio of possible consumers of the free product who might be converted to paying customers to the total market size. If I have awareness with .01% of the target market, giving copies away to raise awareness to 10% of the market, where 10% of those might convert (1% total) is a good deal. But if I have awareness with 60% of the target market, and give my product away, with a 10% conversion rate, I’ve lost a great deal.”
It’s hard to disagree with such statement, especially applied to software projects. However, some might think that proprietary model is for leading software vendors and open source distribution is for unknown SMBs only, but it’s not true.
Open source model may be appropriate for companies of any size, whether they are large or small. The point is to define the niches correctly and to manage the awareness selectively. Some products may be issued according to a proprietary model and others according to a viral model. One can support another if it is accurately positioned. Watch the ‘proprietary’ market leaders and you’ll see how they learn from their open source competitors.
Tim also writes, “For many types of publishing, I absolutely believe that giving away free copies is the best way to build the market.” And I can’t help adding, for many other types of publishing the best way to build the market is not to give away copies at all.
Matt Asay Tim O’Reilly’s post on ‘online promotion via viral distribution’ and comments:
…We buy things because they’re useful (or because we’re mindless sheep that can’t say ‘no’ to a well-marketed brand - I do think some of this goes on in IT, generally, and certainly with open source projects, as well). Open source happens to succeed because it’s available (in the sense that it’s easier for me to download and try it out than a proprietary product - not because of source code availability, but because of the licensing/distribution model), and because quality undergirds that availability.
Perfect words! A number of vendors forget that the major feature of any product is the value, rather than free distribution. Users download programs to satisfy their needs, rather than to sit and stare at the beautiful yet useless interfaces. That’s the same reason open source community improves the code and adds new capabilities. For the sake of the value and valuable result that is guaranteed by the program.
The value comes first. That’s why there’s no sense in expecting your product to bring you revenues if the very product is totally useless.
David S. Linthicum has recently written about Rich Internet Applications (RIAs). He claims four reasons to move toward RIA:
Leverage dynamic behavior at the user interface
Loosely couple the presentation layer and logic layer
Provide both connected and unconnected modes of usage
Improve integration for data residing locally and remotely.
And then, later in the text, he adds:
“The reasons you use RIAs are many, but most find that the ability to get the value of software without having to go through an installation procedure to be a huge benefit. You always have the best and most current version of the software, and you don’t have to update or maintain the software through its lifecycle. This is the value of SaaS as well as RIA.”
In other words, RIA intersects Software-as-a-Service (SaaS) technology and brings all its benefits.
However, I would lay the emphasis on another important reason, ‘Saving costs and increasing revenues’, which is not obvious sometimes. Technical benefits result in reduced bandwidth usage and so on, but the main point here is interoperability. RIAs allow vendors, customers and partners to collaborate in more effective way.
First, RIA integrates heterogeneous interfaces and reduces iterations in business processes, which increases productivity. Data integration provided by RIA technology enables users to interact with distributed applications no matter where they are located.
Second, RIA provides end-users with enhanced interfaces, which allows embedding more features and capabilities for company’s customers. For instance, RIAs help e-commerce clients control the steps of their orders, as well as simultaneously calculate shopping costs and make more informed decisions. These features allow businesses to add value to their services, reduce process abandonment and improve competitiveness or loyalty.
“The reasons are many”, but it’s all about the money, in the end. Anyway, David S. Linthicum is right, “What you see in your browsers will change forever, and more enterprise applications will be Rich Internet Applications.”
