The Boomi Blog

Cloud Integration top of mind for 2010

As we move into 2010, many industry experts in cloud computing provide their predictions and trends for the year.  As we have watched them roll in, we see an even stronger than normal concentration on integration.  As integration remains top of mind around the adoption of cloud computing adoption, here are some of the mentions we thought were noteworthy:

"The bottom line - when it comes to SaaS, think strategically about integration before you act tactically on your implementation."

ebizQ: The Problem with SaaS by Andre Yee

"You must help clients develop the “golden image” that will be the basis for their cloud server configuration, and then integrate that cloud into the “hybrid cloud” with their existing data centers and applications."

TechRepublic:  Cloud computing migration issues: What you need to know by Rick Freedman 

 

"There are trillions of dollars in invested capital in applications and infrastructure, and companies aren't going to throw all of that stuff away," Poulley said. "One of the big things that's going to happen in the next year is this whole idea of hybrid, on-premises and cloud integration. I think of it in terms of extending the enterprise perimeter to the cloud."

eWeek:  IBM Preps for Cloud Computing War vs. Google, Microsoft in 2010 by Clint Boulton

 

"No matter how much functionality one SaaS vendor will provide, it will never be enough. Integration will always be necessary, but where/how will it be delivered? Go for the gold with a browser based integration option. Just figure out how to do it better/cheaper/faster than force.com, Microsoft, Google, Amazon, etc..."

CNET: Seven businesses to look out for in 2010 by James Urquhart

 

"As the array of cloud-based alternatives and deployment methods expands, the demand for integration tools and services will also soar. This will also fuel the growth of specialized value-added resellers (VARs) focused on particular horizontal application or industry-specific requirements."

SeekingAlpha: 6 Key Challenges Facing Cloud Computing in 2010 and Beyond by Jeff Kaplan

 

"We’ve seen the rise of Twitter and Facebook as social communication tools.  This year, those modes of realtime communication will find their way deeper into the enterprise.  Salesforce.com is set to launch Chatter, it’s realtime stream of enterprise data which interfaces with Twitter and Facebook and turn them into business tools. Startups like Yammer and Bantam Live are also making business more social." 

TechCrunch: Ten Technologies That Will Rock 2010 by Erick Schonfeld

 

"Given the demands of the social customer and the new demands on business, it has been hard for any one company to provide a complete solution for a particular company’s needs by themselves. Rather than just seeing an opportunistic partnership here and there, there is a growing trend toward long term strategic alliances that fill out portfolios. Witness Marketo’s not only linking up to Helpstream but salesforce.com’s Twitter integration (NB: an odd choice) as well, providing a “socially inclined” traditional 3-pillar CRM suite as part of their new ecosystem.  This is increasingly the case with other vendors announcing partnerships with companies filling out their social CRM portfolios. This is reflected with the premier partnership that NetSuite announced with InsideView; the integrations we’re seeing with Twitter from pretty much every vendor; on the other side, the recent announced integration between salesforce.com and Get Satisfaction; and the announcement of the partnership between Neighborhood America (soon to be called INgage Networks) and Microsoft in the public sector."

ZDNet: Okay Here Goes - CRM Forecast 2010 - Part I by Paul Greenberg

Ecosystem Enablement at Mashery's Business of API's Conference

The folks over at Mashery invited us to speak about how Boomi can turn an API into an ecosystem at their latest Business of API's conference.  Below is the video from our session:

Announcing the Dream Widget Challenge

Back in late July we announced the latest addition to our cloud integration platform - the ability for our users (such our ecosystem of partners) to build and embed Boomi Widgets.  A Boomi Widget is an integration, or connection, between 2 or more applications.  This integration allows information to be shared automatically between the connected apps, eliminating the need for re-keying data.  The Boomi Widget contains in it the "rules" of the integration, as well as a wizard to step through the setup process of the integration.

It is just as important to understand what a Boomi Widget is not as well.  A Boomi Widget is not a sample process, it is not a guide or quick start; it is a fully functioning application purpose built to integrate 2 or more specific applications.  The Widget user does not log into the AtomSphere platform and see process models and have to look at Data Maps, this work is already done.  They simply extend these base process for their buinsess needs, and deploy it; either onto a desktop/server of their own, or into Boomi's cloud.

Today we are excited to announce our Dream Widget Challenge.  In short, the Challenge enables the salesforce.com community to vote for the next Boomi Widget to be built.  Leading candidates are defined for you, and if you don't like any of those you can add your own!  And just to spice things up, not only are we committing to build the winning widget, but we will build it in time for Dreamforce, and give it away for free.  It's our commitment to community-driven innovation.

So please head over to dream.boomi.com and vote today, and be sure to share this site with your colleagues!

The Role of Cloud Utilities

Last week I attended a networking event for the Nokia Cloud Symposium.  It was a solid group of folks in attendance, and featured a guest spot by Brian Jacobs, general partner at Emergence Capital.  For those who don't know, these guys invest 100% of their fund in SaaS/Cloud Computing, no exceptions.  Brian was asked to speak to the group on trends around SaaS/Cloud Computing, and one of the areas he spent a good amount of time on was what he referred to as Cloud Utilities.  These are service offerings that extend the capabilities of cloud computing providers, both known public providers like Amazon, Google, Force.com, OpSource, as well as emerging providers and large enterprises looking to marginalize their infrastructure costs much like Amazon wanted to.  He highlighted a number of examples of these cloud utilities, including SSO, security, and integration, noting that these types of offerings are not going to be core competencies of the cloud providers, yet are absolutely critical to their success, and therefore the cloud providers will need to work very closely with them.  He also pointed out that ideally these utilities should not be bound to any one cloud but instead need to traverse different environments as needed.

Obviously for us it was great to hear such a strong validation of our cloud integration strategy, but it also speaks to the evolving but ongoing need for integration.  18 months ago SaaS was talked about much more than "Cloud", however this is no longer the case.  Let's face it, Cloud, being the much broader term that it is, lets many more people participate in the movement, such as by simply installing their traditional on premise software into Amazon EC2 and calling it "Cloud".  This is both good and bad of course, as installing traditional software in EC2 doesn't solve the really important problems that true multi-tenant applications will solve, such as one code base for easier, less invasive upgrades, as well as point-and-click customization.

But regardless of how/where the application is deployed, integration remains one of the ongoing barriers to success.  While the fundamentals of the problem remain the same (avoiding silo'd applications, solving business process inefficiencies, etc.) the way in which it must be solved has changed dramatically.

"Inter-Cloud" Still Needs Integration

I've been following the development of the Inter-Cloud concept with interest over the past many months.  Popularized by Cisco (the network is the cloud), Inter-Cloud is described variously as a “federation of clouds based on open standards,”  an “elastic mesh of on demand processing power deployed across multiple data centers” (in this post by Greg Ness) or simply a “cloud of clouds.”

The posts I have read on the topic deal with issues such as standards for network protocols, virtual machine representation, and identity/security.  The vision, once these details have been worked out, is a completely ubiquitous computing environment that seamlessly blends all forms of clouds and their physical instantiations into what seems to me to be a single, massively parallel cloud computing environment.

But as awesome as that vision is, it won’t solve the pesky interoperability challenge of the business applications that run on these linked clouds.  And assuming we want to do something more interesting than host websites, email and excess storage, existing and new apps need to migrate to the cloud.  In the virtual layer cake in the sky, we talk about Infrastructure as a Service, Platform as a Service and Software as a Service.  But too many cloud "taxonomy" and “ecosystem” charts leave out the critical element of application integration.  It’s time for integration to take its rightful place on the layer cake!

What Inter-Cloud does for cloud computing (compute as a utility), integration does for SaaS (applications as a utility).  Inter-Cloud may make cloud computing environments interoperable but it is SaaS integration platforms (think "cloud middleware") that make SaaS (and on prem) applications interoperable.

I blog in another post about "the case for cloud middleware."  We have the opportunity with the SaaS industry to not repeat the mistakes we made in the enterprise era with hardcoded, brittle, essentially dead integration.  We have the opportunity with cloud middleware to implement living, breathing, scalable interfaces that will enable and drive the growth of SaaS and cloud computing.  After all, if business apps don’t make the transition to the cloud, the future of SaaS will certainly be in peril and the full potential of cloud computing will not be realized.

When Debating “The Economics of SaaS,” Lets Not Use Fuzzy Math

I recently read with great interest a story in BusinessWeek titled, “The Economics of SaaS,” penned by a group of writers known as the "Staff of the Corporate Executive Board.” In it they meticulously detail out the cost savings realized from SaaS solutions vs. the equivalent on-premise solutions. Personally, I am shocked at how this type of comparison continues unabated. Is this a last ditch effort from some of the die hard on premise hold-outs trying desperately to prove to the world that it actually makes more sense to install a separate copy of software at each customer site? I think it is important to look at the following considerations, to make sure they are being contemplated in this comparison:

1. Generally speaking, a SaaS solution that has a competitive on-premise offering will be priced around the same as the maintenance fees the on-premise vendor will charge. Yes, if you take Salesforce.com's published list price and do the math times 500 users it will look expensive, but it doesn't work that way. The unit price goes down as the volume of users increases.
   
2. Integration does not cost more when integrating SaaS, it costs less.  If you use legacy integration products, then yes it will cost more as you will have to code adapters to support the SaaS application(s) you are trying to integrate, install software into your DMZ, potentially spin up instances on Amazon, etc. However, some integration providers serving the SaaS market offer a product that is itself SaaS, driving the cost of integration down to a fraction of what it used to be in the on-premise world.
   
3. All bets are off if the approach of the "SaaS provider" is to install their single-tenant software in Amazon and call it "SaaS".  The primary principle of SaaS, multi-tenancy, is eroded.  This provider will have a much higher baseline of costs because they need to provisioning hardware (regardless if physical or virtual) for each customer they sign up, and they will simply pass onto the customer.  Contrast that with Salesforce.com, that claims 500 servers are powering its 60,000 SFA customers. That is the benefit of multi-tenancy realized.  

The favorite point that people like to make when comparing SaaS to on-premise is how in years two and three the cost savings for SaaS become marginalized against the investment made to "own" your on-premise software.  But what if we factored in to this math a comparison of the number of releases made by the vendor and utilized by the customer?  One of the top reasons on-premise customers move to SaaS is the "rev lock" they face, where due to the complexity and cost of the customizations and integrations made to their specific version of some on-premise application, the cost to upgrade to the latest release rivals the initial investment made in product in the first place.  Yet regardless of this, the customer must still pay their maintenance fees. Compare that to SaaS, where generally providers do four significant releases per year, and 100% of their customers get 100% of these releases.  That's because the SaaS vendor must build the product in such a way that they can upgrade it for their customers, and not break them or have any impact on their business operations at all.  This model works and is proven not just by the leaders such as Salesforce.com, but look at most well known SaaS ISV's and they will showcase how well this architecture works.

The Human Capitalist Nails the SaaS Test

In Jason Corsello's most recent post entitled Is Your Vendor Really Operating "In the Cloud"? The 3 Most Important Questions to Understand About SaaS he does a great job discussing pass/fail tests to give to a provider claiming to be SaaS.  We are very passionate about the benefits of multi-tenancy, which Bob covers very well here and here.  And the product update aspect is critical too; remember that many customers move to SaaS to unlock the chains preventing them from upgrading their on-premise software, mainly due to extensive customizations and custom coded integrations.  A multi-tenant architecture forces the vendor to implement processes that can be performed "once per instance" vs. "once per customer".  This means that while the customer must take the upgrade, the vendor must upgrade them seamlessly and not break their setup.  The customer gets the benefit of access to the latest innovations released by the vendor, and does no work to get them.

Structure '09: Real-Time Cloud

I had a chance to sit in on Marc Benioff’s keynote address entitled “The Real-Time Cloud” during the GigaOm’s Structure ’09 conference yesterday (Boomi was an exhibitor).  It was an interesting session with Om Malik asking Benioff a wide range of questions about origins, maturity and future of cloud computing. 

Benioff spent a lot of time talking about cloud integration. He noted systems like Twitter, and the benefit if integrating with it which is basically that you get access to information as it happens in real time, and can act on it.  In legacy enterprise applications this is not possible because when these applications were built Twitter did not exist.  It’s a great and important point.  Cloud and particularly SaaS applications make possible for the first time a new level of real time, app to app integration that was not possible with enterprise applications.  Obviously at Boomi this is the core to how we operate, but it was refreshing to hear other people in the SaaS space highlight the critical role integration plays in the evolution of cloud computing.

And of course because it’s Benioff, you know you’re going to get some good advice and even better quotes.  He even took the time to tweak Oracle chief Larry Ellison.  Here’s a sample of some of my favorite call-outs from the address:

On recent comments Ellison made about cloud computing:

“Only 6 months ago Larry made caustic remarks about cloud.  Then, on a recent investor call he says, ‘the key to on demand is on premise, and the key to on premise is on demand.’ It is very Zen.  If you can understand that, then you will understand why the cloud is what it is."

On why Oracle and others are rushing to embrace the cloud:

"They don’t have a choice. Their overall enterprise apps revenue has declined, what else will they do?"

On what SaaS start-ups should do if they are trying to convince large enterprises to turn to the cloud:

“I think the number one thing is you have to get your customers selling for you.  Customers don't listen to the vendors anymore.  If you can get the gravitas around customers recommending you and referring you, you are golden.  If you can't you are in trouble.” 

When Om asked how he defines the cloud, Marc went through what he calls the 4 generations of the cloud:

1. Acknowledged Diane Greene for starting VMware, predicated on the problem of underutilized servers burning way more energy then they needed, and inventing the concept of virtualization to dramatically increase this efficiency. 
2. Acknoledged Amazon for taking this to the next level and offering a public version of this virtualized environment, allowing you to transfer LAMP stacks into their compute environment and pay for only what you need.
3. Acknowledged Microsoft launching "aZUNE" (Azure) where you can move .Net applications onto their servers. 
4. He then refers to Force.com a pure play environment, or "4th generation".  He says this is not just salesforce.com doing this, but also Google with App Engine.  In his opinion, these pure plays offer a much greater base of efficiencies.  As an example he cites salesforce.com's own SFA application, stating that SFA has approx. 60k customers and 2 million users.  In their primary data center they deliver four 9's of availability, and have only 500 servers in it powering all these customers.  He concludes by stating this is possible because you are operating within their managed environment: you get much greater efficiency vs. in amazon where you can run anything regardless of how efficient that application may or may not be. 

I’d be interested to hear what else jumped out at folks, or if they heard any interesting conversations in the hall or at the other presentations.  I thought it was a great show with a great group of people, and look forward to participating in future events.

Boomi @ Gluecon

Boomi recently attended and presented at the first Gluecon event in Denver, CO.  It was a great event, and Eric Norlin did a great job putting it together.  As the name implies, the focus is on integration in the web/cloud paradigm, everything from data portability, identity mgmt, cloud integration, etc.

I had a session, embedded below, that really represents the culmination of the types of conversations Boomi has with both customers of SaaS as well as the providers of the SaaS applications themselves.  Please check it out and let us know what you think!

A 360 Degree View Of SaaS Integration

View more presentations from Boomi.

Please leave us your comments below.

The Goldman Sachs SaaS Scorecard gets a C-

Goldman Sachs recently released their take on the SaaS market from an investment perspective with a report entitled "Getting SaaS savvy—successful investing in on-demand."  A summary of the report can be found here.  In it, they list their scorecard for evaluating SaaS applications, specifically, how well suited an application is for delivery via a SaaS model.  I thought I would go through each point and give you our take:

"The data used by the application either originates outside the firewall or goes outside the firewall at one point in time. If the data is already traveling outside the firewall, this reduces additional concerns the company would have had with the data security. Having the application outside the firewall may also make access easier for all parties who need to use it."

Boomi View:  Disagree.  Talk about taking the easy way out!  Yes certainly the conversation is easier when this is the case, but this is not a requirement for a viable SaaS application.  Take a look at the kind of data stored in the applications provided by salesforce.com; information like who your customers are, what you have sold them, how much they paid for it, how happy they are, etc.  This information is some of the most guarded information a company has, absolutely vital to its operations, and does not originate outside a firewall or go outside a firewall in a non-SaaS CRM. 

"The application is used by a distributed workforce and non-badge employees. The ubiquity of Internet and Wi-Fi connections is making it easy to access on-demand applications on the go, driving adoption of this technology. By hosting the application outside of the company’s own network, customers can get help solving the issues associated with compliance and identity and access management with users outside their own company."

Boomi View:  Agree, although if ranking these by priority this one is low on the list.   

"A network effect is important. By hosting several customers’ data in one place, some SaaS solutions are uniquely positioned to take advantage of potential network effects. For example, seeing security threat information across 100 customers versus just one should provide a better view on the broader threat environment, driving a richer solution for all customers."

Boomi View:  Absolutely agree.  This is a huge reason why multitenancy is so important.  The first step is "hosting several customers' data in one place" as mentioned, but without multitenancy, you can't do much with that data.  This is why "sticking your product in a data center and calling it SaaS" doesn't work; a mutlitenancy design fundamentally puts all of this data in one place opening the door to new views and insights on how customers use your application, and in return allows you to offer them insights into their usage as well.  Take mint.com as a great consumer example, once you start using Mint for your personal finance management, Mint will tell you what people in your zip code spend on groceries, restaurants, gas, etc.  Not possible without aggregate access to this information.

"Quick implementation required with lower upfront costs to defuse deployment resistance. SaaS solutions can be deployed orders of magnitude more quickly than their classic counterparts and for lower initial deployment costs. For applications that need to be implemented quickly (to meet an impending timeline such as review season or quarter close) this is an attractive attribute. "

Boomi View:  Agree, although what application doesn't need to be implemented quickly?  This is just a fundamental point of SaaS; the SaaS delivery model allows for faster implementations, and is a huge value proposition in all application categories.

"The application needs very little or no integration with other applications. Currently this seems to be the biggest barrier to SaaS adoption, in our opinion. One customer we spoke with said, “The thing that is always a challenge with Software-as-a-Service vendors is integration. It’s even a challenge with Salesforce.” We believe that as applications are become more standards based, with standard APIs and the like, this will become less of an issue. For now, however, we would avoid SaaS focused offerings that require too much integration."

Boomi View:  Disagree.  Obviously we are going to be biased here, but any business application that is transactional in nature stores any information about your customers will need integration.  In the majority of cases, SaaS ISV's are taking a best-of-breed approach, focusing on delivering one application very well.  This proliferates the need for integration.  Using this point in the scorecard basically eradicates 90+% of current SaaS offerings from being viable investment candidates!  I would agree that a SaaS ISV needs a strong integration strategy before going to market (this is the whole reason we launched AtomSphere), as customers are definitely savvy enough to bring up integration during the sales cycle, and no just saying "code to our API's" is not an integration strategy :). 

Also, API standardization has nothing to do with easing any perceived integration challenges.  EDI has been in the process of standardization for no less than 30 years and standards like ASC X12 are at best loosely intrepreted and at worst completely disregarded.  And even if connectivity became completely standardized, this is still only 1/3 of what integration is.  Integration is equal parts (1) connectivity, (2) data transformation, and (3) workflow.  See Bob's great post on this topic here. 

The application, in most situations, does not require heavy customization. The architecture of SaaS solutions does not lend itself readily to customization. These types of applications will likely remain on-premise for the near term.

Boomi View:  Disagree.  Again, any business application that is transactional in nature or stores information about your customers will be customized.  Strong customization is available, today, in the majority of established SaaS players.  Further, if you are building on PaaS offerings like Force.com, your application will be "customizable out of the box" without you having to build all of that complexity yourself!

"Addresses a business process that should embody a strict process and industry-wide best practices are well suited to SaaS delivery as well. SaaS solutions have limited ability to be customized, so companies that are looking to improve their internal process by adopting standardized best practices will be well suited with SaaS deployments."

Boomi View:  Disagree, but for the same reasons as above.  But I would add that, in fact, because of SaaS, companies can now for the first time build ad hoc applications in days to quickly prototype new ideas without having to involve developers focused on other strategic areas of the business.  This point paints an innacurate picture that SaaS is this behemoth inflexible thing...in fact much of SaaS's existence is owed to the vast failings of on-premise software deployments that were just that.

"Require relatively little training. Intensive training is a hurdle to adoption, which, in the case of a subscription service, can lead to customer churn."

Boomi View:  Agree, and would add that the way the training is delivered should factor into this churn.  On-demand, self service training is the first step in ensuring your users stay up to speed on your products capabilities.

"Applications that can be readily adopted by an individual or a small department rather than a whole enterprise. Low subscription costs and quick and easy implementation allows one or a couple of people within a company to try the product easily, without the need to run a budget by higher-ups. No minimum seat requirement should also spur this type of viral adoption."

Boomi View:  Agree, this one is critical.  And if you think that this is the end of your opportunity with this customer, it is the actually the beginning.  Once they see the value of SaaS and how immediate the value gain is, they will become internal advocates and your application will spread throughout the enterprise.

"Are not heavy computationally intensive/time critical. SaaS solutions do not deal well with large amounts of data that need to be processed and passed back and forth between the database and the program. Over time, as speeds increase and bandwidth becomes more readily available, this should become less of an issue."

Boomi View:  Disagree.  Sorry to end on a low note, but SaaS solutions do very well with large amounts of data that need to be processes and passed back and forth between the database and the program.  Remember that much of SaaS borrows from consumer applications like Google.com and eBay, that process some of the largest volumes of data in the world.  Amazon got so good at scaling their infrastructure for vast amounts of data processing that they now let customers have access to this same infrastructure via their EC2 and S3 services.

Being a firm believer of "getting in the ring", I would offer 2 points I think were missed:

The application can intially augment and ultimately displace a large customer base of primarily dissatisfied customers.  Look for graveyards of product lines that were scooped up by companies who then keep the application on life support, increase maintenance fees each year, but don't innovate the product.  You will find bitter customers screaming for new innovation.  They will be skeptical, but because SaaS lets you "try before you buy" (if done right) they can try out the application, make sure it works for them, and then engage with your sales team once they are comfortable the solution will fit their needs.

The application benefits from collaboration.  Ok yes they almost all do, but take even rudimentary examples like Google Spreadsheet, where you can have multiple authors reviewing and editing the same spreadsheet at the same time.  This is fundamental difference between the on premise equivalents.

What else am I missing?  Fire away!