Last month Phil Wainright at ZDnet wrote a post about SaaS as an
appliance. I didn’t think much about it until I read a related post from Ian Thomas that got me searching and I found this from Ross Mayfield.
After some noodling I’ve come to the conclusion that SaaS as an appliance a bit of a misnomer. Why? Well, at it’s heart the movement to SaaS is about the shift to offering services and not code, but the appliance model breaks that shift. I’ll cite just a few examples of what I mean.
First, the model only works for relatively small pieces of software and not apps like ERP or CRM. I think this is why Ross’s efforts at Socialtext have been succesful. Second, the recent posts are all bout virtual appliances, but that implies the IT shop has to build and maintain the infrastructure, in this case a Xen or VMware farm and SAN and possibly a database. Plus, IT will have to be responsible for backups. Last, as Ross found out, once the app is inside the firewall, the ISV isn’t likely to have carte blanche for upgrades, so they’ll be forced to workout upgrade windows.
There are other implications for the ISV. IMHO support costs will be higher because in addition supporting many different releases simulataneously you’ll also have installation, upgrade and compatability issues to contend with.
Since here at 3tera we build utility computing software I have to admit I’m biased, but SaaS as an appliance really sounds like marketing hype to me.