SaaS mashups shape up

SaaS mashups shape up

Summary: As SaaS vendors and integrators begin to roll out enterprise mashups, the mashup's seminal role as the disruptive motor at the heart of the on-demand model is becoming clear.

SHARE:

Much has been written about the promise of mashups to become serious business tools — as well as the obstacles and challenges they must overcome along the way. It's only now, more than six years since the notion of mashups first came to the fore (they acquired the name a little later), that SaaS vendors and integrators are beginning to realize the full potential of the mashup for enterprise applications. As this first wave of commercial enterprise mashups comes to maturity, it is making clear once and for all the mashup's seminal role as the disruptive motor at the heart of the on-demand model.

Xactly Rewards is a 5-way enterprise mashupAs a case in point, take Xactly's 5-way mashup, announced Monday (image courtesy of Xactly). Using Salesforce.com's Force.com platform as the foundation, the SaaS vendor has mashed up its own sales compensation application with Amazon.com's retail catalog, the Paypal payment system and an iGoogle gadget. The mashup creates an enterprise-class incentive rewards management and fulfilment application that at the same time is economical enough to be affordable for smaller businesses — subscriptions will be $10 per user per month, at the end of a 90-day free-of-charge launch window that ends December 1st.

Using the application, an organization can set up award targets to incentivize its sales, marketing or contact center teams, with points instantly convertible to retail purchases from Amazon's online catalog. The awards are paid for out of a Paypal account, which the organization maintains in credit to match its awards budget. Users can view their incentive targets and tallies from within Salesforce.com, or using the iGoogle gadget.

This five-way mashup is a substantive proof point for applying mashups to enterprise applications. It pools the disruptive economics of at least three separate giants of on-demand: Amazon, PayPal and Salesforce.com. Will any ZDNet reader dare argue with me that you could/should do this in-house and do it better and cheaper? It's simply not tenable. Nor is it any more practical to think of implementing a similar mashup to Amazon, Paypal and the rest from an on-premise application — leaving each individual customer to negotiate their own gateway access to Amazon, Paypal and the rest, along with the necessary security precautions. It's a recipe for multiple implementation disasters.

In this respect, the Xactly mashup makes the case for multitenancy more convincingly than any other example I've come across. It's crystal clear that making any one of these five components single-tenant instead of multi-tenant would instantly destroy the economic benefit and immediacy of the one-to-many multi-tenant model. A multi-tenant mashup is a one-to-many instance: it makes all of its service integrations available to any of its clients. In contrast, mashing up single instances one at a time is a laborious, repetitive and economically wasteful activity.

The example makes evident the huge economic leveling effect that comes into play from mashups of multi-tenant services. Xactly has been able to deploy a series of off-the-shelf components that benefit from the economies of scale of market leaders such as Amazon and PayPal, while the low-cost PaaS mashup development approach means that its developers could focus their efforts on the business logic — workflow rules and policies, all managed by the Force.com platform, are at the heart of the application. Using Salesforce.com's PaaS platform meant Xactly could develop the finished application in two months using just "a couple of developers," according to Xactly's VP of marketing Karen Steele. Its marketing costs will also be lower because the prime marketplace will be Salesforce.com's million-plus subscriber base (although the effective market is narrower as the capabilities used by Xactly Rewards require an enterprise subscription rather than the less costly and more widely used Professional or Team subscriptions).

As an aside, although Salesforce.com benefits from its role as the underlying platform for Xactly's mashup, it isn't immune from the economic leveling effects of the multi-tenant mashup. In April, cloud integrator Appirio released its cloud storage product for Salesforce.com, which allows subscribers to bypass the relatively expensive costs of storing documents and other assets on Salesforce.com's servers, taking advantage of Amazon's much lower utility storage pricing. Appirio seems to be taking a leading role in enabling such multi-tenant enterprise mashups — it released an interesting business contacts mashup in May and has contributed the iGoogle element of Xactly's 5-way mashup.

In summary, I think the Xactly mashup is a harbinger of the disruptive effect of multi-tenant enterprise mashups, and of much more interesting developments that are yet to emerge. There's still a ways to go, though, especially when it comes to matters such as integrated payment and user authorization. Xactly remains wedded to a subscription revenue model but this application is interesting in that it uses a combination of two monetization strategies — as well as the $10 per user per month subscription, Xactly earns what Steele described as "a very modest markup" on each Amazon transaction. It's designed to cover the transaction handling costs but, if the application became successful enough to generate large volumes of transactions, my guess is that it could potentially begin to offset the subscription fee. However it's worth bearing in mind that, in order to use the application, subscribers not only have to pay Xactly's $10 subscription — they must also have an enterprise-level Salesforce.com account. What's more, those subscriptions have to be purchased separately instead of as a single packaged offering, adding unwanted hindrances to the onboarding process.

Topics: Amazon, Cloud, Collaboration, Enterprise Software

Phil Wainewright

About Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

5 comments
Log in or register to join the discussion
  • I see little added value

    Combining PayPal and Amazon.com on a Salesforce platform does what for me again?

    If I am an Amazon.com customer I can click on the shopping cart and use my account information to make my purchases. So having a PayPal link is of limited value to me. Amazon already stores my credit card info so purchasing is already easy.

    If I am Amazon.com and I want to offload my credit card/ billing method to PayPal that has some benefit. But how do I get access to valuable marketing information that comes from my clients buying from me (Amazon.com)?

    If I am Amazon.com how much business am I going to lose if PayPals services go down? Can I sue PayPal to get some revenue back? Do I have a direct technicla support tech I can call to get things moving to restore my business? What happens to my business if the Salesforce platform gets sold to another vendor that doesn't support my mashed up interface? What happens to my business if Salesforce goes completely under and their services are not purchased by anyone?

    Ask any manufacturing business that has outsourced their operations to China from another country and they will tell you relying on third party vendors requires expensive high level managers to manage your vendor relationships. You end up having to explain to customers on an almost daily basis why their goods and services will be late or damaged. Sure you save yourself the cost of building and maintaining your own factory but you spend a lot of money on travel, shipping, repairs, lost business, and management. In physical manufacturing you can see a slight cost saving so outsourcing is here until every country on the planet get's unionized. But outsourcing abstract items and IT is not such a good idea. A data center may be expensive but it pales in comparison to a factory. You have all of the overhead of vendor management with very little if any savings to closing up the data centers.
    mr1972
    • Perhaps you've missed the point...

      I feel as though you are missing an extremely critical piece of this issue ? one that Phil summarized beautifully in the original blog post.

      With all due respect, if all you?re taking away from this announcement is that it?s merely ?combining PayPal and Amazon.com on a Salesforce.com platform??, there has been a missed connection somewhere along the line.

      The key point here is not to enable people to purchase products using Salesforce. As you quite rightly point out, purchasing goods and services from Amazon.com is a fairly simple task. Rather, what makes this announcement noteworthy ? and what?s gotten the media so excited, including luminaries like Phil Wainewright ? is that companies are able to develop and deploy non-cash rewards programs for any of its employees, and do it in a way they have never been able to do before now. Sales teams, call centers, or any group that needs additional motivation can be incented with award targets, created at the drop of a hat, and all of this can be managed and monitored through Salesforce, or even iGoogle.

      Reps can check balances and redeem their points simply by logging into their CRM tool ? no inconvenient gift cards to redeem (or misplace, more likely).

      This is revolutionary, and will allow forward-thinking executives to nudge the behavior of their various teams in the desired direction so that it directly benefits both the company and the employees themselves. The gratification is instant, the fulfillment vehicle is one with which they are undoubtedly already familiar, and the results will be spectacular.

      -Christopher W. Cabrera
      CEO, Xactly Corporation
      ccabrera@...
  • RE: SaaS mashups shape up

    This post is spot on and I want to commend the folks at xactly for a very innovative application. Having come from the on-premise software world myself, I know how hard it is for customers to deploy applications - let alone integrate them together. Because of this, most applications end up as silos internally.
    nrmehta
    • Signs

      Portent of things to come - SaaS Mashups make sense. Bravo Xactly!

      Best.
      alain
      alain@...
  • RE: SaaS mashups shape up

    You catch a glimpse of, i be concerned about <a href="">cheap cell phones</a> seems awful, i <a href="">here</a> bidding exceptionally be rancid in place of <a href="">site</a> if not <a href="">celulares chinos</a> characteristic i had the crack <a href="">check</a>
    http://www.beebond.com/cell-phones | http://www.beebond.com/apple/ipad | http://www.beebond.com/video-games | http://www.beebond.com/es/cell-phones | http://www.beebond.com/es/led-lights/laser
    xobcooltorn