Enterprise SaaS and the cloud

ISVs today have three choices when setting out to build a SaaS application:

• A. Build the application on your own infrastructure, which you'll have to assemble from scratch using open source and commodity components.
• B. Build it on a packaged platform from an established application infrastructure vendor such as Oracle, Microsoft, Progress Software, etc.
• C. Build it on a cloud computing platform and let the provider take care of the infrastructure for you.

Yesterday, I discussed options A and B. Today, having witnessed the launch of Salesforce.com's Force.com "developer-as-a-service" platform, there's quite a bit to say about option C [disclosure: Salesforce.com is a client].

Force.com is one of a rapidly expanding number of cloud computing platform choices available to ISVs today. Just to mention a few that spring to mind, they range from basic infrastructure hosting propositions such as Amazon's EC2, Joyent and OpSource [see disclosure]; through generic application development platforms such as Bungee Labs, Iceberg and Coghead; to platforms that serve specific application categories such as NetSuite SuiteBuilder and social network platform Ning.

Talking of Ning, its founder and CEO Marc Andreessen joined Marc Benioff on stage today to discuss the emergence of cloud computing platforms and what it all means. Andreessen isn't at all surprised to see so many different platform providers springing up: "I think there's going to be a whole wave of thousands of platform companies in this new model ... One of the reasons you're going to see so many of these things is these concepts are applicable to so many different domains." Dan Farber's write-up has more of Andreessen's comments.

Force.com is distinctive, among those dozens that have so far emerged, in its focus on becoming the generic cloud computing development platform for the enterprise domain. Salesforce.com has gone out of its way to make the development experience something that enterprise class developers will be comfortable with. There are three separate ingredients in this transformation, each of them made available today in "developer preview" mode.

• First there's the Force.com IDE, based on Eclipse, which gives a developer-eye view into the Force.com environment.
• Crucially, (as foreshadowed in my interview with Salesforce.com's SVP Platform Steve Fisher last October) there's a new metadata API, which takes customizations that would previously have been done in Salesforce.com's business user-friendly point-and-click configuration interface and abstracts them into editable lines of XML code.
• Finally there's a code sharing capability that allows distributed teams to collaborate on a development project.

There are still some missing components (check back on that October interview for some clues as to what's yet to come) but today's new features already make cloud development look like serious stuff — serious enough for enterprises and ISVs to use it to build and deploy serious business applications. Customers appearing at today's launch event to talk about their use of the Force.com platform to build applications included Kaiser Permanente and Dolby Labs, as well as start-up ISVs Apttus and Riskonnect. Customers for Apttus' proposal and contract management application include Symantec and Thomson. Riskonnect's first customer for its risk management application is Southern, a major power utility.

These customer successes demonstrate that cloud computing is certainly a viable platform option for ISVs targeting the enterprise market. For startups whose 'secret sauce' is centered on the business logic and outcomes rather than underlying specialized application infrastructure, then it's well worth forgoing the hassle of building your own platform in favor of using a cloud-based platform. Riskonnect's founder and CEO Bob Morrell was emphatic: "My first software company was a SaaS vendor in the insurance risk management space. I built my own infrastructure, and I'm never going to do that again."

Where an application requires a robust generic infrastructure, especially if it needs to be delivered outside the firewall or with global reach, cloud computing again offers an economic advantage of being able to leverage the provider's shared infrastructure without having to own the major cost of directly supporting a widely distributed user base.

But if the infrastructure needs to be tailored to the application, then a packaged or custom platform may be a better choice. Certainly, platform providers themselves are a case in point. "We even use Oracle" at Ning, Andreessen confessed at the tail end of his eulogy to cloud computing.

What conventional ISVs need to beware of, though, is the temptation to simply build your own infrastructure because that's what you've always done and it's what you've got the expertise in. Sometimes there's a strong case for deploying all your technical expertise as an ISV in building the application, so that you can assemble all the components and tune it yourself. But increasingly, the emergence of cloud computing means that the case for doing it yourself is progressively getting weaker and weaker.